Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 35
35
Acknowledged
Multi-year funding settlements insufficient to solve underlying local government financial problems
Conclusion
We support the return to multi-year funding settlements, but the local government funding reforms announced to date will not solve the underlying problems in the system by themselves. (Conclusion, Paragraph 127)
Government Response Summary
The government acknowledges the need for local government funding reform, confirming its commitment to multi-year allocations through the 2026-27 LGFS and simplifying the funding landscape via the Fair Funding Review 2.0.
Government Response
Acknowledged
HM Government
Acknowledged
The Fair Funding Review 2.0 (FFR 2.0) marks the next step in reforming local government. The last time funding was allocated to local authorities using an up to date set of funding formulae that sought to account for local authority differences in demand, costs and council tax raising ability was in 2013–14. This failure to update since then and the subsequent mismatch between funding and need has led to unequal outcomes for people and places, with visible neighbourhood services in deprived areas worst hit. The Government is committed to ensuring that funding is targeted effectively at the places and services that need it most and allocated in a way that empowers local leaders to deliver against local priorities. This includes committing to multi-year allocations for each council through the upcoming 2026–27 LGFS and a commitment to simplifying the local government funding landscape through bringing together grants from across government into large, ringfenced consolidated grants.