County councils have hit back at the suggestion that a government review of funding unfairly favours rural areas over inner cities.
Leaders of urban authorities had complained that the government’s proposed new formula for council funding from 2020 onwards will harm cities by focusing on population rather than deprivation.
But the County Councils Network (CCN) insists that the review will remove“disproportionate” weightings given to deprivation, while ensuring deprivation remains a “key factor” in the new settlement.
As reported by LGC last week the new proposal would introduce a single per capita foundation formula for which population is the only cost driver, alongside seven service-specific formulae.
The CCN points out that deprivation will be taken into account across four of the service-specific formulae - adult social care, children’s services, public health and fire & rescue - while rurality is reflected in a new cost area adjustment methodology to be applied to the foundation formula.
Paul Carter (Con), chairman of the CCN and leader of Kent County Council, said: “Everyone in the local government sector has accepted that the current opaque, complex methodology of funding councils is long out of date and not fit for purpose.
“CCN has long argued the case for a flatter formula that is most responsive to population levels. As the government has set out, there is little evidence to support the continuation of this situation that unfairly bakes in higher expenditure in urban areas and fails to recognise unmet need elsewhere.”
Cllr Carter defended the inclusion of rurality in the area cost adjustment. He argued that metropolitan boroughs should recognise that rurality had been downgraded in the government’s latest proposals, after initially being one of three main common cost drivers.
He added: “The current weightings for density in the revenue support grant is eight times higher than for sparsity, and the evidence simply doesn’t justify this. The government proposals rightly put rurality and density on a more equal footing.”
At the weekend Sir Stephen Houghton, Labour leader of Barnsley MBC and chair of the Special Interest Group of Muncipal Authorities, said removing deprivation as a factor from a number of services brought the whole review into question.
“The credibility of the whole review is – in my opinion – at stake, as I am not sure how the ministry will be able to justify that services such as waste collection, street cleaning, homelessness, public transport and libraries are needed solely on the basis of population numbers no matter where you live.”