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Local Authority Funding: Allocation

Volume 648: debated on Monday 5 November 2018

7. What steps his Department is taking to ensure the equitable allocation of funding to local authorities. (907440)

We are undertaking a fair funding review of local authorities’ relative needs and resources to address concerns about the fairness of the current system. This will determine the new funding allocations for local authorities through a more up-to-date and fairer funding formula.

Rural areas are historically underfunded and in West Oxfordshire we need more funding for road repairs, upgrades to the A40 and adult social care. How is fairer funding progressing and will this be addressed in the spending review?

I am pleased to say that we are making very good progress and are considering many of the topics raised by hon. Members, including rapidly changing demographics affecting social care and the cost of delivering services in rural areas. I look forward to collaborating closely with the sector and with my hon. Friend’s county as we look to introduce a simple, accurate and transparent new funding formula.

If funding is so equitable, why is North Lincolnshire Council giving people on the lowest incomes such a low level of support with their council tax, at only 50%? Why is the council sending nearly all its discretionary housing payments back to the Government?

Decisions about local council tax support are rightly for individual local authorities to make themselves; it would not be appropriate for me to dictate to them. The fairer funding formula is designed to determine the equitable nature of funding distributed to all local authorities. The hon. Gentleman will know that the current system dates back to 2013-14, and indeed many elements date back decades before that. We are determined to fix it and bring it up to date.

I thank the Minister for supporting the measures in the Budget exempting public toilets from business rates and providing a commitment to take action regarding second home owners who are avoiding business rates. I very much welcome his words on a fair funding formula, but when the fair funding formula was previously introduced, it was dampened away. Will he make a commitment that rural councils really will see the benefit of a new fairer formula this time?

I pay tribute to my hon. Friend and, indeed, to my hon. Friend the Member for North Cornwall (Scott Mann) for successfully placing in the Budget measures on public toilet relief and second homes. With regard to my hon. Friend’s second point, I am determined to ensure that the new formula is transparent and that all local authorities—not just those in rural areas—have a clearer idea about their allocation under the new formula, and transition to those new allocations in a relatively short timeframe.

A recent report by the New Policy Institute shows that the majority of local government cuts have fallen on the 10 most deprived councils, despite the fact that they have higher numbers of looked-after children and adults needing social care and other council services. Will the Minister now commit to funding councils properly and according to levels of need, rather than political colour, as the Government appear to be doing at the moment?

It is simply not the case that that is how funding is determined. Although out of date, the current funding formulas do contain deprivation measures and funding is distributed on the basis of need. That is also how the new funding for adult social care, announced just last week, will be distributed—according to the relative needs formula.