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Home Publications The Fair Funding Review: the big questions and the tricky issues

The Fair Funding Review: the big questions and the tricky issues


The government is undertaking a ‘Fair Funding Review’ in conjunction with councils. The aim of this review is to propose a new system for allocating funding between councils, which will be based on updated and improved methods for estimating councils’ differing revenue-raising capacities and differing spending needs. The IFS and CIPFA hosted a roundtable on 12th September 2018 to discuss some of the big questions the review needs to address and tricky issues it needs to contend with.

The big questions include:

  • How should redistribution and incentives be balanced in the new system?
  • How can the subjective judgements required in designing and implementing a new system be exercised transparently?

The tricky issues include:

  • What data, indicators, and methods should be used to assess councils' spending needs?
  • How can we account for councils' abilities to raise revenues from council tax, and other sources?

This presentation, which kicked off the roundtable, sets out the key findings from recent IFS research which highlights these issues, and looks at how different choices on assessing needs, measuring revenue-raising capacity, and balancing redistribution and incentives, could affect different councils.

Find out more

Newspaper article
David Phillips, associate director at the Institute for Fiscal Studies, discusses the current health of local government finance, and the prospects of a 'fairer' funding formula helping improve the situation.
Newspaper article
The last time the government updated its assessment of what different councils in England need to spend was in 2013. And since 2016, the cuts the government has been making to the grants it gives to councils have taken into account the council tax revenues they raised in 2015-16. This has left ...