The network, which represents 36 county authorities across England that cover towns, rural and coastal communities said it would continue to work to achieve ‘consensus’ amongst councils on a new funding formula.
The CCN added that the government should not avoid difficult decisions in ensuring it delivered a fairer, evidence-based funding formula by April 2021 that finally delivers a ‘genuinely new settlement’ that truly ‘levels up’ council resources, tackles historic underfunding of their areas and a fairer approach to council tax levels across the country.
In August last year, 33 leaders from the network wrote an open letter in the Daily Telegraph urging the Prime Minister to ensure that the much trailed ‘levelling up’ agenda included a ‘cast iron commitment’ to implement government’s review of relative needs and resources.
Previous research from CCN, whose councils serve some 26 million people, has shown that due to historically lower funding and deeper cuts to core grants for its member councils, shire county areas received 60% less funding than Inner London and 46% than metropolitan and city authorities. If the 36 councils that make up the network were funded at the same per person average in England, they would be receiving an additional £3.2bn per year.
Speaking at the Local Government Association (LGA) Finance Conference, Local Government Minister Luke Hall MP (see here) said that the government was making ‘good progress’ on the review and that the direction of policy ‘has been welcomed by many’. He confirmed the government would ‘be consulting on further detail of the proposed reforms as soon as we can’ including providing councils with exemplifications of potential funding allocations.
The government launched the Fair Funding Review in 2016 and it was scheduled for implementation in April 2020; however, implementation was postponed. This policy will change the ‘needs assessments’ of local authorities and therefore the distribution of funding between different councils.
CCN said that the confirmation was welcome and praised ministers for providing the clarity for the sector. County leaders said that it believes councils of all shapes, sizes and political colours will benefit from a fairer distribution of resources, including authorities in the Midlands, the North, to outer London boroughs: from towns to rural areas and coastal communities.
The minister’s speech yesterday urges councils to seek compromise and as much consensus as possible. In response, CCN said that it supported these aims and had already set out a range of compromises. These included considering the role of deprivation in the new formula and including funding for services such as home-to-school transport on a ‘per head’ allocation basis; despite CCN research showing the costs of these services were almost 10 times higher in their areas.
However, CCN said that an aim to achieve full consensus should not be used to avoid difficult decisions which could result in some areas seeing their funding reduced in line with their new needs assessment. CCN said that minimising the number of councils who could witness a reduction in their resources and help fund the transition to the new formula could be achieved by the sector uniting to make the case to the Treasury for an overall increase in the funding for local government as part of a comprehensive Spending Review.
Local councils in England’s rural and shire counties are the lowest funded upper-tier authorities; receiving just £240 per person for public services such as social care, children’s social services, public health, bin collections and libraries – this is 60% less compared to residents in inner London receive (£601) and 46% less compared to councils in metropolitan and city authorities (£419).
Cllr Carl Les, County Councils Network finance spokesperson and leader of North Yorkshire County Council, said:
“The Fair Funding Review is an essential part of the ‘levelling up’ agenda put forward by the Prime Minister. We are therefore pleased that ministers have listened to the County Councils Network and other supporters of the review and we want to work with them to support the progress and implementation of an evidence-based funding formula that delivers a genuinely new and fair settlement for underfunded councils.
“We believe that councils of all shapes, sizes and political colours will benefit from a fairer distribution of resources, from authorities in the Midlands, the North, to outer London boroughs, from towns to rural areas and coastal communities. Therefore, the minister is right to emphasise the importance of compromise in attempting to achieve as much consensus as possible. County leaders have already played their part: recognising that an appropriate weighting for deprivation may have a role to play in the foundation formula and the inclusion of home-to-school transport on per-head basis.
“Yet it is clear that difficult decisions will have to be made by ministers to eradicate the historic underfunding of parts of the country. These can be minimised if the sector unites to make a compelling case for a further significant injection of new resources over the medium term as part of a comprehensive Spending Review. CCN will continue to lead the way here, working with the Local Government Association and special interest groups across the sector.
“A fairer funding settlement for counties will allow councils to preserve frontline services, invest in local and national priorities and continue to innovate service delivery to improve outcomes for residents.”
Notes to editor