William Eichler 20 June 2025

Government announces ‘fairer funding’ reforms

Government announces ‘fairer funding’ reforms image
© Sutthiphong Chandaeng / Shutterstock.com.

Local government funding will be overhauled to support left behind places, while competitive bidding for funding pots will be scrapped and the ‘statutory override’ for SEND deficits will be extended, the Government has announced.

The Government today launched an eight-week consultation on reforms that aim to change how funding for councils is allocated to ensure that deprivation is properly recognised in the ‘assessment of need’ of councils.

It proposes simplifing the system by which councils bid for grants and reforming how adult and children’s social care services are funded to better reflect the level of demand.

The ‘statutory override’, which has allowed councils to keep Special Educational Needs and Disabilities (SEND) deficits off their main budgets, will also stay in place until 2027/28.

Minister for Local Government and English Devolution, Jim McMahon OBE said: ‘There’s broad agreement across council leaders, experts, and parliamentarians that the current funding model is broken and unfair. This Government is stepping up to deliver the fairer system promised in the 2017 Fair Funding Review but never delivered.’

Cllr Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities (SIGOMA), said the proposed reforms will deliver ‘a fairer and more sustainable system’.

‘A decade of disproportionate cuts, outdated formulas and short-term settlements have left our members with shrinking resources, struggling to meet rising demand. It is therefore very welcome that there will now be a focus on delivering a funding system that supports?the most deprived areas.’

Critics have reportedly raised concerns that the reforms could lead to a reduction in funding for councils in London and the South East, which in turn could result in council tax rises and service cuts.

In a statement responding to the announcement, the District Councils' Network (DCN) said the change would redistribute funding away from small towns and rural areas towards bigger cities.

Cllr Jeremy Newmark, DCN Finance spokesperson, said it would 'unfairly penalise' users of district council services.

Cllr Pete Marland, chair of the Local Government Association's (LGA) Economy and Resources Board, said the LGA will be ‘working through the details of this consultation.’

‘Different councils will have contrasting views on these proposals. Individual councils will need to know the implications, and a transitional mechanism is crucial to avoid putting services at risk.’

SIGN UP
For your free daily news bulletin
Highways jobs

Director of Social Work and Social Care

Trafford Council
£100,731 to £104,625
You will join a values-driven senior leadership team, providing visible and responsive leadership. Manchester
Recuriter: Trafford Council

Housing Ombudsman

Housing Ombudsman Service
£130,095 per annum, negotiable based on experience.
The Housing Ombudsman Service allows colleagues to choose if they wish to work in the London office, from home or a hybrid of the two London (Greater)
Recuriter: Housing Ombudsman Service

Head of Legal and Monitoring Officer

Powys County Council
£90,347 – £98,135 per annum/y flwyddyn
We’re seeking an energetic, innovative, and inspirational leader to join our team at Powys County Council Powys
Recuriter: Powys County Council

Senior Business Development Officer (MaaS)

Essex County Council
£36341.0000 - £42754.0000 per annum
Senior Business Development Officer (MaaS)Fixed Term, 2-year contract with potential for extension Full Time, 37 hours per week£36,341 to £42,754 per England, Essex, Chelmsford
Recuriter: Essex County Council

Customer Advisor (Events) - Braintree District Council

Essex County Council
Up to £13.8000 per hour
Customer Advisor (Events) - Braintree District Council£13.80 PAYE / £17.67 Umbrella Braintree, EssexPart-Time, Temporary Closing Date
Recuriter: Essex County Council
Linkedin Banner