At his speech at the LGA conference, Michael Gove MP (Con, Surrey Heath) acknowledged that the current funding system is “out of date” and that there “desperately needs to be a fairer, more rational allocation of resources across authorities."

Talking of reform of funding to local government, Mr Gove said:

“The system we have now doesn’t work everywhere.  It is out-of-date.  There desperately needs to be a fairer, more rational allocation of resources across authorities.  Also, there need to be fewer ringfences and individual funding pots.

“There need to be more rewards for councils that transform their communities: in the form of incentives to drive meaningful local growth.  And I believe we will find the solutions together. Moving from complexity to a simpler set-up is in itself a significant undertaking.

“That is why we will engage and consult with you to create a system that both meets the needs of all of our citizens and can withstand economic shocks and inflationary pressures.”

He went on to say:

“Today, we are publishing the government’s plan for a new, simpler, landscape for local authorities, in line with our white paper commitment.

That will change how not just DLUHC but how other departments deliver funding.”

Responding to the speech and the new plan, RSN’s Chief Executive, Kerry Booth says she still has concerns: “Whilst it is refreshing to hear that our archaic approaches to funding are being reviewed, something the RSN has consistently called for, these proposals don’t go far enough to address the inequalities between rural and urban. “The new plan says there is no ‘one-size-fits-all’ answer but to truly streamline the local funding landscape, the Government needs to consider its basic data sets.  In moving more to an allocations system for capital funding, the allocation metrics should be fair to both rural and urban areas.  We would also want to see them subject to consultation following the pilots.  I’d like to see one of the pilots take place in a truly rural setting, so that we can see if this approach will work for our rural councils.  Equally where competition is retained it too must be fair to all types of councils and take into account the capacity of rural councils. “To put is simply, the Government is trying to work out how it can ensure all areas get a fair share of the pot.  But if the quantitative data it collects doesn’t reflect the experiences of the communities on the ground, the allocation of funding will never be fair.”

You can read the speech from the Rt Hon Michael Gove here and find out more about the Government’s plan for a new simpler, landscape for local authorities here.