Laura Sharman 26 October 2016

Research reveals winners and losers in council funding reforms

Funding reforms could affect the quality of council services across the country, with county and metropolitan councils likely to lose significant sums of money by 2020, new research has warned.

The Institute for Fiscal Studies found that allowing councils in England to retain 100% of business rates revenue will help boost the funding of 52 (mostly district) councils by 5% or more by 2017.

However, 119 councils will lose money under the scheme which could lead to ‘greater divergence in council service quality’.

The report found that poorer councils more reliant on grants have cut their spending by 33% on average, compared to 9% by richer councils.

‘The changes to local government finance in England during the 2010s will be truly revolutionary,’ said David Phillips, a senior research economist and an author of the report. ‘We will have moved from a system where equalisation and insurance was paramount, to one with much more emphasis on incentives for growth, but also more financial risk for councils.

‘Along the way there will be lots of tricky policy decisions. And there are big picture questions, such as whether these changes will actually empower councils to deliver more growth, or just burden them with additional revenue and spending risks. The IFS’s new programme will look at both types of issues, in an effort to ensure this revolution is subject to proper public scrutiny.’

The report also found that - excluding education spending - councils are planning to spend 22% less on service provision in 2016-17 than they did in 2009-10.

For an in-depth look at how plans to scrap government funding to local authorities and replace it with business rate revenue are fraught with problems, visit The MJ.

SIGN UP
For your free daily news bulletin
Highways jobs

Transport and Major Work Manager

Slough Borough Council
£54,556 to £60,085 per year Inclusive of Local Weighting Allowance of £1096
Drive the future of transport and infrastructure in Slough Slough, Berkshire
Recuriter: Slough Borough Council

Restorative Justice Practitioner

Essex County Council
£26284.00 - £33256.00 per annum + pension
Restorative Justice PractitionerPermanent, Full Time£26,284 up to £33,256 per annumLocation
Recuriter: Essex County Council

Events Administrator - Harlow District Council

Essex County Council
Up to £14.8800 per hour
Events Administrator - Harlow District CouncilHarlow District CouncilTemporary, Full Time£14.88 ph PAYELocation
Recuriter: Essex County Council

Adults Social Worker - South Essex (Various Teams)

Essex County Council
£38487 - £51834 per annum
We're an adult social care service that wants to see citizens of Essex have as much choice and control over the way they live their lives as possible England, Essex, Basildon
Recuriter: Essex County Council

Autism Training Coodinator

Essex County Council
£48121.0000 - £56612.0000 per annum
Autism Training CoodinatorFixed Term, Full Time£48,121 to £56,612 Per Annum Location
Recuriter: Essex County Council
Linkedin Banner