Skip to main content

Local Government Finance

Volume 479: debated on Monday 21 July 2008

To ask the Secretary of State for Communities and Local Government what changes there have been to the mechanisms for the allocation of money from central government to local government since 1997-98. (219978)

The main changes to the mechanisms for the allocation of money from central Government to local government since 1997-98 are set out in “Local Government Finance Statistics England No. 18 (2008)”, in annexes C5 and D2, a copy of which is available in the Library of the house. The Government regularly review the mechanisms for allocating money to local government, including during periodic consultation on formula grant distribution for local government; and make changes as appropriate.

To ask the Secretary of State for Communities and Local Government what changes there have been to the measurement of deprivation for the purposes of allocation of funding from central government to local government since 1997-98. (219979)

Local funding to tackle deprivation has been distributed in the form of the Neighbourhood Renewal Fund from 2001, and the Working Neighbourhoods Fund since 2008. These allocations have used measures of deprivation—the Indices of Deprivation (ID).

Each version of the ID has evolved to measure deprivation more accurately.

The 2000 ID was ward based, contained 32 indicators, and covered six socio-economic domains.

In 2004 the new Lower Super Output Area (LSOA) geography was used, a new domain was introduced (crime), and the number of indicators increased to 37.

The ID2007 indices were an update to the ID2004, with minor changes to some of the indicators and the number of indicators increased to 38.

More details can be found in the technical reports for each index, published on the CLG website.

Mainstream local authority funding does not use measures of deprivation specifically to allocate funding, however distribution of formula grant to local authorities uses broad measures of the social and economic characteristics of an area. The factors used in each year since 1997-98 are set out in the Local Government Finance Report (England) for each year. These reports are approved by Parliament and copies are deposited in the Library of the House.