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Extra funding worth £14 million per annum over the next three years will be made available to Strategic Health Authorities (SHAs) that, following consultations, decide the local community would benefit from the scheme.
Studies have shown fluoridated water can decrease tooth decay among children by 15 per cent and current examples show clear oral health benefits.
Children in fluoridated Birmingham, for example, have half the cases of tooth decay as children in non-fluoridated Manchester.
Alan Johnson said: "Fluoridation is scientifically supported, it is legal, and it is our policy, but only two or three areas currently have it and we need to go much further in areas where dental health needs to be improved.
“It is an effective and relatively easy way to help address health inequalities - giving children from poorer backgrounds a dental health boost that can last a lifetime, reducing tooth decay and thereby cutting down on the amount of dental work they need in the future.
"But there are people who hold strong views on this subject, so it is important that any proposed schemes are fully and widely consulted on. The guidance published today will help local health bodies to ensure there is an opportunity for everyone to put forward their views.
“The extra funding I am announcing means that, should local people decide to support fluoridation, SHAs have the resources to implement it."
The new Government funding will allow SHAs in areas with poor dental health to meet the cost of fluoridation schemes without depleting funds for other health needs.
Source: The Labour Party of UK