LGIU Response: Fair Funding Review 2.0

Jonathan Carr-West, Chief Executive, Local Government Information Unit (LGIU), said:

“LGIU welcomes the government’s consultation on fair funding, which promises to be a much-needed update to the grant allocation formulae that recognises how much the local government landscape has changed, moves away from bid funding and will give struggling councils a more proportionate level of funding for their needs. LGIU has campaigned for a fair funding review for years. We agree that this is a vital step to fixing the foundations of local government finance in England.

“Although fair funding is a necessary step, the government rightly recognises that it is only one of a number of changes needed to put local government funding back on a sustainable footing. There are questions deferred on several of the most pressing issues facing local governments: SEND deficits, adult social care, and no commitment to council tax revaluation – an equally outdated part of local government funding, just as much in need of reform as the funding formulae.

“Local government finance is a complex system, and although updating the funding formulae will help alleviate pressures across many councils with the highest relative need, a more fundamental rethink will be needed before local government finance is resilient across the country and sufficiently flexible to allow councils to pursue their democratic mandates.

“We would urge councils responding to the consultation to take into account not only how the funding formulae will affect your services, but also how the new grant allocation will interact with other reforms coming down the line, especially reorganisation, devolution and adult social care reform. As we all comb through the details of these complex adjustments to the formulae, we have to make sure we never lose sight of the bigger picture.

“The government has a vision for the future of local government, with mayoral strategic authorities playing a major part. Local government needs to know what this means for the future provision of services, and funding, as we move into this new era.

“We would encourage the government to ensure that councils, who are undergoing a wide programme of challenging reforms, are always central in these conversations, and that the pitfalls of the last fair funding review are avoided. Local government is ready to work with the government to ensure that this time the review will result in funding that meets councils’ and citizens’ needs.”