TAXPAYERS' money should be channelled into the most deprived areas of Sheffield to narrow the gap between rich and poor, David Blunkett said.
The Brightside MP insisted his call was not a return to the politics of "class war" but warned the council's current method for dishing out grants and funding "threatens to entrench inequality and disadvantage" in the city.
He admitted that despit
e record investment the government has still not done enough to improve areas like Brightside.
Whitehall departments should target grants at the poorest Sheffield neighbourhoods instead of taking all areas of the city into account.
He said Sheffield missed out on money from the Financial Inclusion Fund because wealthy areas like Hallam prevented it from qualifying.
Barnsley, Rotherham and Doncaster all received cash from the fund, which gives people in deprived areas free face-to-face debt advice.
The combined North and East area of the city is the size of Leicester and, if "free-standing", would get "every possible help going", he said.
But when Sheffield is taken as a whole for the purposes of awarding funding "the affluence in one part cancels out the deprivation in another".
The former cabinet minister accused the Lib Dem council of having a "perverse" policy of distributing money equally to all areas regardless of need and called for it to reassess the way it distributes resources to Community Assemblies and forums.
He said: "I would ask the council to not simply interpret this as class war, because it isn't. I think it is in the city's interest as a whole – I think it is in the interests of the better off – to actually improve the future and wellbeing of those who are less well off.
"I am not arguing we somehow start taking away resources from children in Hallam. I'm arguing we should be targeting the resources that are available over and above the basics to the areas of greatest need."
Mr Blunkett said he had spent £9,000 from his taxpayer-funded office cost allowance to pay for the research and called on local authorities to carry out similar studies.
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