Fair Funding Review delay: CCN response

The government has last night confirmed that the Fair Funding Review has been delayed due to Coronavirus, and will no longer proceed as planned in 2021.

This is the second time that the review has been delayed, following a deferral last year owing to the Brexit impasse. However, the County Councils Network has secured a commitment to the review from three successive governments and once the outbreak is over the network will continue its efforts to advocate for the review to be completed and implemented quickly.

Below, the network responds to the announcement.

Cllr Carl Les, finance spokesperson for the County Councils Network, said:

“Confirmation of another delay in the implementation of the Fair Funding Review is hugely disappointing to our member councils. An immense amount of work has gone into ensuring that three successive governments continued to progress this much-needed reform, with all councils agreeing that the current method of funding councils is wholly out of date.

“However, those in local government could not have anticipated the scale of the current Coronavirus crisis, nor the impact it would have on council finances in just a matter of weeks. With the government and councils alike focused on tackling the virus, this must take priority, alongside the sector’s efforts in ensuring councils are fully funded for costs and lost income. As we come out the other side of this crisis, the County Councils Network (CCN) will again seek to ensure that the government once again renew their commitment to proceed with the review at pace.

“The scale of the country’s economic shutdown and its consequences will leave lasting questions for the current structure of the local government finance system, and in particular, the degree of risk councils are exposed to and whether this is the most fair and appropriate way to fund local services. CCN has long argued that the balance between incentive and needs-based funding has become too skewed towards the former in recent years and the crisis has tested the theory behind this over reliance to breaking point.

“Therefore, the Spending Review later this year will need to take a look at the policy of Business Rates Retention and New Homes Bonus alongside ensuring that councils have enough resources on a needs-basis to meet pre-existing funding shortfalls and the additional legacy costs that latent demand from Coronavirus will make upon upper-tier councils.”