Formula grant is distributed to all local authorities in England taking into account the relative needs and relative resources of each local authority relative to all other authorities providing the same services. There is also a central allocation and a floor damping mechanism. For the current three-year settlement, 2008-09 to 2010-11, the floor damping mechanism ensures that all authorities receive at least the minimum percentage increase in grant year-on-year on a like-for-like basis.
In the 2008-09 to 2010-11 settlements, the 2004-based sub-national population projections for 2008, 2009 and 2010 respectively have been used as the main measure of the resident population. These projections were published by the Office for National Statistics on the 27 September 2007, and were the latest data available at the beginning of the three year settlement period. Population projections take into account trends in fertility, mortality and migration.