In a high-level response, Local Government East have responded to the Government’s Fair Funding Review 2.0. In this response, we say that while the Fair Funding Review is a step in a positive direction, it has yet to offer answers to some essential questions regarding council finances going forward.
For the most part, there is a lot to be welcomed. The commitment of the government to three-year settlements is very welcome, and rolling three-year updates of the funding formula, to reflect demands as they appear, would be very welcome. Furthermore, the government’s commitment to funding simplification is also good for our local authorities, as it means less time sifting through small grants and more time delivering services to residents.
We also appreciate some of the changes made to the funding formula. In particular, the inclusion of a daytime population adjustment feels correct, and will be of use to more coastal areas in our region.
The consultation also brings up questions around housing incentivisation for local authorities. We suggest that key support, in both administration, expertise, and finance, in unlocking sites would be of great use to local authorities. Furthermore, potential incentivisation around bringing properties back into social rented tenure could be useful to increase the number of homes for social rent available. We also welcome the government’s intention to look again at Right to Buy, and it is currently a large disincentive for local authorities to invest in housing.
However, one thing that the Fair Funding Review does not do is confirm how funding will be handled in key areas of fiscal difficulty. In particular, there is little information around temporary accommodation, SEND provision, or social care demand. These pressures are a key cause of financial issues for local authorities, and while further consistency and simplification is welcome, it is hard to conclusively answer whether the newly designed system will work without answers to these particularly hard to address areas.
Cllr Graham Butland, Chair of LGE, has said: “While the improvements to certainty in funding through the three-year settlement are welcome, along with promises of greater simplification, more information is needed on how key pressures are addressed within the local government sector, including temporary accommodation, SEND pressures, and social care demand.”
LGE’s full response to the Fair Funding Review 2.0 can be found here.