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Relative Needs Formula

Volume 485: debated on Thursday 18 December 2008

To ask the Secretary of State for Communities and Local Government whether the relative needs formula developed by her Department includes a weighting for the number of (a) vulnerable adults and children, (b) former offenders, (c) drug addicts and alcoholics, (d) homeless people and (e) mentally ill people in an area; and what measures are in place to ensure that funding follows the client across local authority boundaries in such cases. (244848)

The formula grant distribution model consists of a number of individual relative needs formulae (RNFs) for each of the main service areas that are provided by authorities—children's services, adults' personal social services, highways maintenance, police, fire and rescue, environmental, protective and cultural services, and capital financing.

The individual weightings used in each of these RNFs in the current year can be found in Chapter 4 of the Local Government Finance Report (2008-09).

http://www.local.communities.gov.uk/finance/0809/lgfr0809s/chapter4.pdf

These RNFs estimate the need to provide services in an area relative to other areas and are based on socio-economic and demographic factors. Most RNFs consist of a basic client group, plus "top ups" to take into account additional need related factors such as deprivation, additional population, density and sparsity.

The distribution of formula grant takes into account the relative needs, the relative ability of an area to raise council tax locally (resources), a central allocation and a floor damping mechanism. It is an unhypothecated block grant i.e. authorities are free to spend the money on any service provided they meet their statutory duties. For these reasons, it is not possible to say how much grant has been provided for any particular service. Therefore, the funding formula does not include measures to ensure that funding follows individual clients across local authority boundaries.