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

Head of Pensions

Hertfordshire County Council
£84,421 to £93,565 plus benefits and relocation support
Welcome and thank you for your interest in leading Hertfordshire Pension Fund as our next Head of Pensions Stevenage, Hertfordshire
Recuriter: Hertfordshire County Council

Tutor & Holistic Educator (Suffolk, Norfolk & Essex) - Lapwing

Essex County Council
£27430.0000 - £42084.0000 per annum + Term time
Tutor & Holistic Educator (Suffolk, Norfolk & Essex) - Lapwing EducationExternal OrganisationPermanent, Full Time£27,430 - £42,084 depending on skills England, Essex, Chelmsford
Recuriter: Essex County Council

Skills & Development Coach (Suffolk, Norfolk & Essex) - Lapwing

Essex County Council
£24375 - £35257 per annum + (term time only)
Skills & Development Coach (Suffolk, Norfolk & Essex) - Lapwing EducationExternal OrganisationPermanent, Full Time£24,375 - £35,257 depending on skill England, Essex, Chelmsford
Recuriter: Essex County Council

Graduate Highways Engineer

West Northamptonshire Council
£31,324 - £33,017
This is a fantastic opportunity to begin a career that shapes the way communities grow and move. We’re looking for a motivated, analytical, and curious individual to join our Highways Development Management team at West Northamptonshire Council Northampton
Recuriter: West Northamptonshire Council

Graduate Trainee - Procurement

Essex County Council
£28090.00 - £33047.00 per annum
Graduate Trainee - ProcurementFixed Term, Full Time£28,090 up to £33,047 per annumLocation
Recuriter: Essex County Council
Linkedin Banner