Fair funding review failing to consider councils’ capacity to raise revenue

The recalculation of local government funding allocations should take into account all the ways councils could bring in money, explains the IFS’s Neil Amin-Smith.

Much of the discussion surrounding the government’s ‘fair funding review’ has focused on how the relative needs of different councils should be assessed.

Less attention has been paid to the fact that the review is also considering how differences in councils’ resources should affect funding allocations.

However, decisions taken on the latter are likely to have just as large an effect on what councils get as the updated assessment of their needs.