County Council backs growing calls for fairer funding for local government

At their final meeting of 2021, on 7 December, members of Hampshire County Council’s Cabinet will hear how the Authority is amongst a key cohort of lower-funded councils nationally, pressing central Government to provide a fairer funding deal for local government

Dec 3 2021

County Council Leader, Councillor Keith Mans has written to Hampshire’s MPs to seek their support for a more equitable funding solution – teaming up with around 20 other low-funded councils to raise awareness of the problem and recommend to Government a short-term temporary solution.

Councillor Mans explained: “For a long time, shire councils like Hampshire have received the short straw when it comes to funding from central Government, and with another delay to Government’s Fair Funding Review (FFR), we face a further three-year funding drought for those authorities at the bottom end of the funding table.

“We believe a more equitable funding formula is needed in future, particularly in the face of ever growing demands for social care and the added financial pressures from COVID. We accept that major funding reform at the current time is difficult, but some sort of change is needed in the short term otherwise those authorities at the bottom end of the funding tables will continue to be hit the hardest as we are trying to recover from the pandemic.

“The temporary solution would be to introduce a ‘floor’ into the methodology, so all authorities receive a minimum level of core spending power. This could be done as part of the provisional local government settlement and would cost around £300m nationally – to help benefit approximately 26 lowest funded councils – including Hampshire.

“Clearly a short-term fix is not ideal, but it would provide much-needed funding that would enable the system to carry on for a little longer as we await the full implementation of the FFR.

“With funding allocations today still linked back to historic spending levels – rewarding those who spent the most on services decades ago – and significantly out of date data (including council tax bandings still based on 1991 values), we believe a pragmatic approach is required.

“As part of the collective campaign by other low funded authorities, I have signed a joint letter to the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, and separately written to all Hampshire MPs to gain their support in pushing this initiative through. Our aim is to get this included in the provisional local government settlement due in the coming weeks.

“Without extra financial support, those authorities with low core spending power will increasingly struggle to provide essential and valued services to their local communities - particularly given the recent Spending Review announcement limiting the adult social care precept to only 1% per annum. This reduction alone leaves us with a further £14 million budget gap for April 2023 which we will need to address, but thankfully our reserves strategy gives us the time to do this. We must now wait with cautious optimism for Government’s financial settlement announcement for local councils, due this month, and what that might mean for our budgets.”