Counties reject claims of fair funding review bias

CCN Latest News, CCN News 2019 | 23 January 2019

The chairman of the County Councils Network (CCN) has rejected claims that the fair funding review unfairly favours county areas.

Earlier this week, other parts of the local government sector claimed that the exclusion of deprivation from the government’s proposed foundation formula would unfairly penalise urban councils. Responding to this, Cllr Paul Carter stated that while it should remain a key factor in people-based services, the proposals announced by government rightly recognised that current weightings for deprivation were disproportionate.

CCN said that the whole sector agrees that the current system is unfit for purpose, and the network wants to work with the rest of local government to ensure that the new system is fair, needs-led, and can stand the test of time, alongside arguing for more resource for councils in the Spending Review.

Cllr Paul Carter, chairman of the CCN and leader of Kent County Council, said:

“Everyone in the local government sector has accepted that the current opaque, complex methodology of funding councils is long out of date and not fit for purpose.

In the consultation for a suggested future funding for local government, it is wrong to claim that deprivation will be ignored. It is most likely that deprivation will be a significant factor for people-based services, such as adult social care, children’s services and public health – which account for around 70% of all local government spending.

“The remaining non-people based but highly valued services such as libraries, waste, buses, concessionary fares and regulatory services, will be covered by the new foundation formula.

“CCN has long argued the case for a flatter formula that is most responsive to population levels. As the government has set out, there is little evidence to support the continuation of this situation that unfairly bakes in higher expenditure in urban areas and fails to recognise unmet need elsewhere.”

Responding to the inclusion of rurality in the area cost adjustment, Cllr Carter suggested that metropolitan boroughs should recognise that rurality has been downgraded in the government’s latest proposals, as rurality was initially one of the three main common cost drivers.

The updated proposals outline that a measure of both rurality and density will be included in true area cost adjustment (ACA). The ACA would also adjust funding for the higher costs of delivering services in London and the South-East.

Cllr Carter added:

“The current weightings for density in the revenue support grant is eight times higher than for sparsity, and the evidence simply doesn’t justify this. The government proposals rightly put rurality and density on a more equal footing.

In my CCN conference speech late last year, I reached out to metropolitan boroughs, recognising that they do indeed have unique pressures which the fair funding review must identify – particularly in people-based services. I also emphasised the importance of the new funding formula being evidence based, needs led and fair.” 

“We want to work with all the sector, not only to identify these, but also secure the necessary injection of resources at the Spending Review to make a success of the fair funding review”.