Floor damping is already met from central Government funds. It ensures that every authority in England will receive at least a minimum increase in formula grant year-on-year on a like-for-like basis i.e. after adjusting for changes in funding and function. The cost of the floor is paid for by scaling back grant increases above the floor. This provides stability, while allowing some of the underlying change in grant to come through.
We consulted in 2005 on the mechanism for floor damping. The overwhelming majority of responses to the consultation preferred the existing system for funding the floor, by scaling back grant increases above the floor, and we accepted this as the way forward.