Today the Institute of Fiscal Studies has released a new report on the fair funding review. Below, the County Councils Network responds to the report.
Cllr Paul Carter, chairman of the County Councils Network, said:
“Currently, some inner London councils are in the position to charge their residents half the amount of council tax compared to the average shire county. The County Councils Network has long argued that this situation is perverse and unfair, and the Institute for Fiscal Studies report today backs these conclusions.
“As the report suggests, is it unfair to ask residents of other areas – predominantly counties – to effectively subsidise the service provision of London boroughs who have not raised council tax due to generous funding streams. At the same time, they have been able to generate huge income from areas such as parking.
“It is crucial that the fair funding review deals with these issues. I hope the government is brave and backs the report’s conclusion to use notional rather than actual council tax rates in determining funding allocations.
“While the consideration of council tax is important, it is only part of the fair funding review. We will work with all parts of the sector to ensure that the needs assessment is evidence-based, while putting in place the right incentives to deliver housing and economic growth.
“This report also calls for the new formula to reduce complexity to make the funding of councils more open and transparent – this is a conclusion we strongly support.”