Renewed commitment to needs-based review welcomed as two tiers focus lobbying on fairer funding

CCN Latest News, CCN News 2017 | 24 February 2017

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The County Councils Network (CCN) has strongly welcomed the Secretary of State’s renewed commitment to the needs-based fair funding review, putting an end to fears that it could potentially be watered-down and delayed beyond the start of planned business rates reforms in 2019.

Opening the local government settlement debate this week, Sajid Javid said that delivering the fair funding review was one of three key ‘measures’ of the settlement. He confirmed that the new formula would be in place by 2019/20, arguing that the current formula was out of date and stating that ‘rural councils in particular’ have “unique needs that have to be met”.

The fair funding review was announced last year following intense lobbying by CCN, County Leaders, the Rural Services Network (RSN) and MPs from rural constituencies.

During the debate many MPs continued to raise concerns over funding for rural areas, directly linking their support for this settlement on the basis of a cast iron commitment to undertake the needs review.

The settlement was announced as Senior representatives from the CCN, District Councils Network (DCN) and RSN met to continue their discussion on business rates retention. The CCN, DCN and RSN agreed a number of shared principles with regard to 100% business rates retention in the lead up to the first consultation in September last year. CCN and DCN have been tasked by DCLG to provide proposals relating to the design of the system in two-tier areas, including the operation of the two-tier share.

During positive discussions between Members and Officers, it was agreed that the groups would focus on lobbying Government and MPs on securing a fairer funding deal for county and district areas rather than tier shares.

The current consultation is seeking views on the split. However, while renewing their commitment to explore joint proposals, the widespread view at the meeting was that without greater certainty on the quantum and further details on new responsibilities these discussions could not yet take place.

CCN is committed to collaborative, cross sector working on the needs based review and business rates and are also currently seeking further clarification from officials on the timescales for developing proposals and undertaking further analysis to support negotiations.
CCN currently seeking further clarification from officials on the timescales for developing proposals and undertaking detailed analysis to support negotiations.

A spokesman for CCN said:

“There has been growing concern about a lack of progress on the needs-based review and Ministers were potentially getting cold feet. However, it is clear that the Government has listened to the concerns of County Leaders and MPs, and will follow through with a full review to be completed in time for business rates implementation. We strongly welcome the emphasis placed by Sajid on demographic and rural pressures, which are key cost-drivers that need to be considered.

“Government have placed responsibility for developing proposals on the two-tier share with the special interests groups and we are committed to working with DCN with a view to coming to an agreement. However, it is extremely complex and without further analysis of the implications and details on what new responsibilities will be devolved it’s not possible to start detailed negotiations at this stage.

“County and districts ultimately serve the same residents, so the first priority is uniting our voices and seizing the opportunity to address the historic underfunding of our areas through joint lobbying on the needs based review. CCN believe this must be focused on cost-drivers, not regression based on previous spend.

“We must also work closely with the DCN to make the case for the right new responsibilities. CCN are focused on getting the right package for the additional quantum, with a balance between meeting unfunded pressures and new powers over transport, skills and housing to drive growth locally.”