Issue - meetings

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place), which set out a proposed consultation response to the Fair Funding Review.

The Government issued a consultation document on 19^th December 2017 entitled “Fair Funding Review: a review of relative needs and resources.  Responses were required by 12^th March 2018.

The fair funding review would set new baseline funding allocations for local authorities by delivering an up-to-date assessment of their relative needs and resources.  The new funding allocations were expected to take effect form financial year 2020/21, at the same time as a new 75% Business Rates retention model.

Given the significance of the outcome of such a consultation it was important for the Council to add its own response, which was set out at Appendix 1 of the report submitted.  The expectation should be that such review results in a system that is evidence based and fair and the proposed responses to the consultation questions are intended to be technical in nature and/or framed is such a way that they were directed at achieving a rational and fair outcome.

The response incorporated the following broad elements:-

·  Simplicity and fairness were both appropriate principles for establishing a needs assessment but fairness was the paramount objective.

·  Agreeing the principle of using population projections in the distribution methodology including flexibility to adjust for annual shifts in population.

·  Proposing that the relative needs assessment should be refreshed annually with the results applied the year after the forthcoming year.

·  Agreeing that rurality and deprivation should be included in cost drivers in the needs assessment to the degree that the evidence demonstrates a significant link between these factors and expenditure pressure.  Rurality should not be double counted in the Area Cost Adjustment.

·  The weight of different funding formulas should be evidence based, supported by statistical analysis of actual spend levels not the judgement of central Government.

·  A preference for techniques that minimise the roles of judgement and opposition to models such as outcome based regression in which authorities are funded according to the success in delivering outcomes.

·  Outliers identified during the statistical analysis may warrant a separate approach, which could include the allocation of specific grants.

·  Agreement that the service specific cost drivers set out in the consultation appeared to be broadly appropriate.

RESOLVED that the Cabinet recommend that Council approve the attached consultation response to be sent to the Ministry of Housing, Communities and Local Government.