FINANCE

A bigger picture for financial reform

Local government finance reform is not a purely technical exercise. It asks big questions about the kind of country we want to be and the big picture of what we want to achieve with local public services. These issues must be properly debated says David Phillips.

Major changes are afoot in English local government finance. The Fair Funding Review will see new methods and formulae to redistribute funding between councils according to their assessed spending needs and revenue-raising capacity. The expansion of the business rates retention scheme is likely to see the abolition of revenue support grant. And changes to the adult social care system could have big impacts on the cost of the system and how it is financed.

In all these areas, the details matter and local government will need to engage with them. As forthcoming work by colleagues and I will show, the details of how spending needs and revenue capacity assessments are updated – the methods, years of data and local indicators used – can have a major impact on the funding outcomes for different councils.

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