Consultation outcome

Local authority funding reform objectives and principles consultation: summary of responses

Updated 20 June 2025

1. Introduction

1.1. The Ministry of Housing, Communities and Local Government published the local authority funding reform: objectives and principles consultation on 18 December 2024. The consultation closed on 12 February 2025.

1.2. The consultation sought views on the approach to determining new funding allocations for local authorities, and fire and rescue authorities through the Local Government Finance Settlement.

It covered:

• our guiding objectives and principles
• measuring differences in demand for services and the cost of delivering them
• measuring differences in locally available resources
• the New Homes Bonus; implementing changes
• keeping allocations up-to-date

It also covered:

• ways we can reduce demands on local government to empower them to deliver for communities
• sales, fees and charges reform.

Finally, it invited views on the possible equalities impacts of these proposals.

1.3. This publication outlines a summary of the responses to the consultation. Alongside this summary, from 20 June to 15 August we are government’s detailed proposals for funding reform through the Fair Funding Review 2.0. These proposals have been informed by the responses to the objectives and principles consultation summarised here.

2. Responses to the consultation

2.1. The 225 responses received to this consultation have been given full consideration, alongside other representations made during the consultation period. The government is grateful to everyone who took time to respond to the consultation.

2.2. The following table gives a breakdown of consultation responses by the type of respondent.

Organisation type	Count	% of total responses
London borough	24	11%
Metropolitan district	22	10%
Unitary authority	41	18%
Shire county	15	7%
Shire district	49	22%
Fire and rescue authority	6	3%
Combined authority	4	2%
Local authority association or special interest group	12	5%
Other representative group	20	9%
Voluntary organisation	8	4%
Parish or town council	1	>1%
Other respondents consisting of: local authority councillors, Members of Parliament, and members of the public	19	8%
Not answered	4	2%
Total	225	100%

2.3. This document provides an overview of the responses received. It would not be practical to capture every point made in response.

2.4. The percentages in the tables immediately after each question are calculated based on the 225 respondents that responded to the consultation.

2.5. Percentages in the text beneath the tables represent the proportion of those who made substantive comments.

3. The government’s objectives for local authority funding reform

Question 1: Do you agree with the government’s objective to allocate grant and retained business rates income in a way which accounts for differences between local authorities in demand for services, the cost of delivering services, and ability to raise Council Tax locally?

Respondents who agreed with the proposal	154 (68%)
Respondents who disagreed with the proposal	35 (16%)
Respondents neither agreeing nor disagreeing with the proposal	22 (10%)
Respondents who had no view or did not answer this question	14 (6%)

3.1. The objectives and principles consultation sought views on the government’s proposed approach to allocating grant funding and retained business rates income through the Local Government Finance Settlement. The proposals aim to ensure that the funding distribution accounts for differences between local authorities in demand for services, the cost of delivering services, and their ability to raise Council Tax locally. This is to enable councils across the country to deliver high quality services for residents. The business rates retention system will continue to reward local authorities for local business rates growth.

3.2. Two hundred and five respondents left substantive comments, which are summarised in the following paragraphs.

3.3. There was broad agreement for the government’s objective for local authority funding reform. One hundred and six respondents (55%) supported prioritising funding for councils with the greatest needs.

3.4. Twenty-seven respondents (14%) disagreed with factoring in an authority’s ability to raise revenue through council tax and 22 respondents (11%) felt the approach should reward councils that manage demand efficiently.

3.5. Details of the government’s proposed approach is outlined at chapter 1 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 2: In addition to the areas included in this consultation, are there elements of the local government finance system that are not fit for purpose and require improvement and reform? If so, please provide information on reforms required and why.

3.6. The objectives and principles consultation sought views on elements of the local government finance system that are not fit for purpose and require improvement that have not been covered within the consultation.

3.7. Two hundred and five respondents left substantive comments, which are summarised in the following paragraphs.

3.8. One hundred and seven respondents (52%) called for changes to the Council Tax system. Forty-five respondents (22%) called for a fundamental review of the Council Tax system, including a revaluation, and sixty-two (30%) called for other reforms, including a review of banding and the relaxing of referendum principles.

3.9. Thirty-one respondents (15%) who left substantive comments called for service reform and prevention, with thirty-one (15%) calling for a solution to the Dedicated Schools Grant (DSG) deficits.

3.10. At the 2025 Spending Review, the government announced it will provide over £5 billion of new grant funding over the next three years for local services that communities rely on. This includes £3.4 billion of new grant funding which will be delivered through the Local Government Finance Settlement within financial years 2026-27 to 2028-29. This will support an ambitious programme of public service reform, focussed on prevention to  improve outcomes for local residents.

3.11. As part of this, we will provide over £500 million from the Transformation Fund - approximately £200 million of which is in addition to the £3.4 billion settlement – for children’s social care reform. This is on top of maintaining the existing £523 million per year within the local government finance settlement, bringing total investment in children’s social care reform to over £2 billion over the multi-year settlement. Details on further funding for children’s social care prevention will be set out through the Local Government Finance Settlement.

3.12. The Department for Education Spending Review settlement confirmed funding for reform of the current Special Education Needs and Disabilities (SEND) system, details of which will be set out in a White Paper in the autumn. We recognise that local authorities will need support during the transition to a reformed SEND system. The government will commence a phased transition process which will include working with local authorities to manage their SEND system, including deficits, alongside an extension to the Dedicated Schools Grant Statutory Override, currently due to end in March 2026, until the end of 2027-28. The government will provide more detail by the end of the year including a plan for supporting local authorities with both historic and accruing deficits. We will set out more detail at the provisional Local Government Finance Settlement.

3.13. Whilst the government has no plans for Council Tax reform, the government is considering opportunities to modernise and improve Council Tax administration and published a Fair Funding Review 2.0 on 20 June 2025 seeking views on options.

4. Guiding principles

Question 3: Do you agree that the suggested principles should inform our approach to updating local authority funding allocations?

Respondents who agreed with the proposal	149 (66%)
Respondents who disagreed with the proposal	25 (11%)
Respondents neither agreeing nor disagreeing with the proposal	28 (12%)
Respondents who had no view or did not answer this question	23 (10%)

4.1. The objectives and principles consultation sought views on whether principles used in the 2018 review of local authorities’ relative needs and resources should inform the government’s approach. These were simplicity, transparency, dynamism, sustainability, robustness and stability. Respondents were also asked whether they agreed to a new principle of accountability being added.

4.2. One hundred and sixty-four respondents left substantive comments, which are summarised in the following paragraphs.

4.3. One hundred and twenty-nine respondents (79%) agreed with using most or all principles, with thirty respondents (19%) specifically agreeing that accountability should be added as a new principle.

4.4. Some of the principles were particularly welcomed by respondents. Twenty-eight respondents (17%) said that multi-year settlements under the stability principle were a priority, and twenty-four respondents (15%) welcomed the idea of a simpler settlement to give councils more flexibility. However, 25 respondents (15%) said that there also needs to be extra flexibility within the multi-year settlement to factor in evidenced based forecast changes.

4.5. Fifty-two respondents (32%) said that there was a strong need for transparency from the government on which principles are being prioritised and how they are being traded off against each other, with 20 respondents (12%) arguing that the sector should be consulted or engaged on how these trade-offs are made. Some respondents suggested further considerations, with 31 (19%) suggesting that fairness or equity should inform the government’s approach.

4.6. The government’s proposed principles are outlined at chapter 1 of the Fair Funding Review 2.0 published alongside this summary of responses.

5. Measuring differences in demand for services

Question 4: Do you agree with our proposal to use the best available evidence and most up-to-date data in the assessment of need, including using the most recent census data?

Respondents who agreed with the proposal	169 (75%)
Respondents who disagreed with the proposal	20 (9%)
Respondents neither agreeing nor disagreeing with the proposal	20 (9%)
Respondents who had no view or did not answer this question	16 (7%)

5.1. The objectives and principles consultation sought views on whether respondents agreed with our proposal to use the best available evidence and most up-to-date data in the assessment of need, including using the most recent census data.

5.2. One hundred and seventy-seven respondents left substantive comments, which are summarised in the following paragraphs.

5.3. One hundred and seventy-three (98%) were supportive of an approach based on the latest data. Forty-nine respondents (28%) stated that the government must commit to regularly updating the data used to allocate funding in the future, to reflect changing circumstances and to avoid the current situation whereby funding is being allocated using outdated data. Forty-five (25%) stated that the government needs to be transparent on why specific data are selected for use and that further consultation on this should occur before final decisions are made. Forty-one respondents (23%) expressed concern with the proposed use of the 2019 Indices of Multiple Deprivation (IMD),as they  do not accurately reflect demand for local services, for example by not fully accounting for housing costs.

5.4. Thirty-six respondents (20%) had concerns or were not supportive of the government’s proposed use of census 2021 data. Primarily this was because the 2021 census was completed during the COVID-19 pandemic, which means it may not be an accurate representation of where people live now.

5.5. Details of the government’s proposed approach to data in the upcoming Local Government Finance Settlement is outlined at chapters 4 and 9 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 5: Do you agree with our proposal to simplify the assessment by reducing the number of Relative Needs Formulae? If you disagree, please explain why and which service areas you are concerned about.

Respondents who agreed with the proposal	85 (38%)
Respondents who disagreed with the proposal	53 (24%)
Respondents neither agreeing nor disagreeing with the proposal	59 (26%)
Respondents who had no view or did not answer this question	28 (12%)

5.6. The objectives and principles consultation sought views on whether respondents agreed with our proposal to simplify the assessment by reducing the number of relative needs formulae. We also invited views on whether additional formulae should be included.

5.7. One hundred and seventy-six respondents left substantive comments, which are summarised in the following paragraphs.

5.8. Ninety-eight respondents (56%) agreed with the broad approach. However, the need to balance simplicity with accuracy and fairness was noted by a significant minority of respondents (60, 34%). By comparison, thirteen respondents (7%) considered the approach to be oversimplified. Forty respondents (23%) highlighted that they wanted greater transparency about how the formulae are calculated.

5.9. Many responses included calls for separate funding formulae to be added, or for particular cost drivers to be better recognised in the government’s assessment. For example, fifty-three respondents (33%) called for the inclusion of a homelessness formula. Forty-three respondents (24%) called for a SEND or home to school transport formula. Twenty-eight respondents (16%) called for a concessionary travel formula. Eighteen (10%) called for the fixed costs formula to remain. Eleven (6%) agreed with the proposal to remove it.

5.10. The government’s proposed approach to relative needs formulae is outlined at chapter 4 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 6: For the children, young people and family services formula, do you agree that the variables set out are the right ones to consider in an assessment of relative need? If you recommend the addition or removal of variables, please provide supporting evidence and recommend a suitable dataset.

Respondents who agreed with the proposal	60 (27%)
Respondents who disagreed with the proposal	28 (12%)
Respondents neither agreeing nor disagreeing with the proposal	51 (23%)
Respondents who had no view or did not answer this question	86 (38%)

5.11. The objectives and principles consultation sought views on the government’s proposed variables for a new, specific relative needs formula for children, young people and family services for upper tier authorities.

5.12. One hundred and twenty-one respondents left substantive comments, which are summarised in the following paragraphs.

5.13. Sixty-three respondents (52%) agreed that the proposed variables were the right ones to consider in an assessment of relative needs.

5.14. Fifty-two respondents (43%) called for further information. Thirty-eight respondents (31%) suggested that additional variables should be considered. Twenty-two respondents (18%) disagreed with some or all the proposed variables or disagreed with the distribution of funding via a relative needs formula. Eighteen respondents (15%) raised concerns on the use of outdated data sets, arguing more recent data is available and should be used.

5.15. The government’s proposed approach to the children, young people and family services formula is outlined at chapter 4 of the Fair Funding Review 2.0.

Question 7: Do you agree that the government should consider updating the data in the fire and rescue services relative needs formula?

Respondents who agreed with the proposal	59 (26%)
Respondents who disagreed with the proposal	4 (2%)
Respondents neither agreeing nor disagreeing with the proposal	26 (11%)
Respondents who had no view or did not answer this question	136 (61%)

5.16. This question sought views on the government’s proposal to update the data in the fire and rescue services relative needs formula.

5.17. One hundred and twenty-one respondents left substantive comments, which are summarised in the following paragraphs.

5.18. There was broad agreement regarding the need for a separate fire formula, due to distinct nature of service and cost drivers. Thirty respondents (55%) explicitly agreed with the proposals to update the existing formula with new data.

5.19. However, nine respondents (16%) also thought that the underlying formula itself needed revisiting. A wide range of additional cost drivers were suggested, including rurality and travel times, non-fire services, tourism and day visitor numbers, high rise buildings, and age and elderly persons.

5.20. Details of the government’s proposed approach to the fire and rescue services relative needs formula is outlined at chapter 4 of the Fair Funding Review 2.0 published alongside this summary of responses.

6. Measuring differences in the cost of delivering services

Question 8: Do you agree we should assess differences in cost using an Area Cost Adjustment (ACA) based on the structure of 2024 ACA? If not, please provide evidence for alternative approaches.

Respondents who agreed with the proposal	113 (50%)
Respondents who disagreed with the proposal	38 (17%)
Respondents neither agreeing nor disagreeing with the proposal	43 (19%)
Respondents who had no view or did not answer this question	31 (14%)

6.1. This chapter sought views on the government’s proposal to continue to measure the differences in cost of delivering services between local authorities by applying Area Cost Adjustments (ACAs) to allocative funding. The government sought views on the proposal to base any future ACA on the structure of the 2024 ACA, and whether to tailor ACA values to each service area. The consultation also invited views on whether we should account for any other factors within the ACAs that could be associated with differences in costs.

6.2. One hundred and fifty-four respondents left substantive comments, which are summarised in the following paragraphs.

6.3. The majority of respondents were supportive of the proposal to continue using an ACA structured along the same lines as the 2024 ACA.  Sixty-one respondents (40%) stated they agreed with the broad structure of the ACA as set out by the Government in the consultation document.

6.4. Other respondents set out their suggestions for additional factors to be included within the ACA. Thirty respondents (19%) called for additional factors to account for rurality and sparsity, twenty-seven respondents (18%) called for factors relating to remoteness, and seventeen respondents (11%) called for the inclusion of factors relating to temporary housing costs. Thirty-three respondents (21%) asked for additional information on the calculation and weightings of different factors within the ACA.

6.5. Details of the government’s proposed approach to measuring differences in the cost of delivering services is outlined at chapter 5 of the Fair Funding Review 2.0 published alongside this summary of responses. In recognition of concerns raised by the sector, we are minded to include a further ‘Remoteness Adjustment’ to account for the variation in costs due to the size of local markets or isolation from major markets. The consultation invites respondents to provide us with further evidence for the impact of remoteness on the costs of delivering services.

7. Measuring differences in the cost of delivering services

Question 9: Do you agree that (other than locally retained business rates) we should only adjust for Council Tax when assessing local resources? If you do not agree, please include details of what other sources of income you think should be included (if any), and how the government should adjust for them.

Respondents who agreed with the proposal	114 (50%)
Respondents who disagreed with the proposal	55 (24%)
Respondents neither agreeing nor disagreeing with the proposal	22(11%)
Respondents who had no view or did not answer this question	34 (15%)

7.1. This question sought views on the government’s proposals on adjusting for variation across local authority resources. The consultation set out the government’s view that we should continue to adjust for local authorities’ ability to raise resources through Council Tax and locally retained business rates, but not adjust for other forms of local income when allocating funding through the local government finance settlement.

7.2. One hundred and sixty-two respondents left substantive comments, which are summarised in the following paragraphs.

7.3. Sixty-eight respondents (42%) explicitly agreed that sales, fees and charges (SFCs) should not be adjusted for when assessing local resources. The most commonly cited reasons for this were: their volatility and variability across authorities; that they are often constrained by legislation; and the risk of perverse incentives.

7.4. Forty-five respondents (28%) argued other types of income stream should be considered; parking receipts were cited the most (29, 18%). Fifteen respondents (9%) suggested that, while other income streams should be explored, this should take place in future funding reform beyond 2026-27 due to practical challenges and complexity of implementation.

7.5. All respondents who referenced the Extended Producer Responsibility argued for it to not be considered when assessing local resources (23, 14%).

7.6. Details of the government’s proposed approach to accounting for resources is outlined at chapter 6 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 10: Do you agree that we should measure Council Tax income by making uniform assumptions on the Level of Council Tax charged by local authorities and factors which determine their ability to raise Council Tax?

Respondents who agreed with the proposal	106 (47%)
Respondents who disagreed with the proposal	55 (24%)
Respondents neither agreeing nor disagreeing with the proposal	26 (12%)
Respondents who had no view or did not answer this question	38 (17%)

7.7. This question sought views on the extent we should use assumptions to determine councils’ ability to raise income through Council Tax for purposes of determining funding allocations.

7.8. One hundred and sixty-four respondents left substantive comments, which are summarised in the following paragraphs.

7.9. Seventy respondents (43%) supported the government making assumptions, including on the level of Council Tax set. Thirty-seven respondents (23%) said this would put councils on a level playing field.

7.10. However, 19 respondents (12%) disagreed with an assumed Council Tax level and said that funding should be based on actual Council Tax levels; with seventeen respondents (10%) concerned that these assumptions would penalise councils who have made historic decisions to keep Council Tax levels low.

7.11. Respondents set out a range of factors which they believe should be taken into account in making these assumptions. Twenty-seven respondents (16%) supported a formula-based approach to take account of factors beyond council’s control, such as deprivation. Forty-one respondents (25%) noted this should reflect the costs of providing Council Tax reduction schemes and thirty-three respondents (20%) said this should reflect the costs of mandatory discounts.

7.12. Twenty-three respondents (14%) requested that if the government is to readjust funding to reflect notional Council Tax levels, then councils with low Council Tax levels should be provided with additional flexibility to increase their Council Tax. This would be to enable them to reach this notional level.

7.13. Details of the government’s proposed approach is outlined at chapter 6 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 11: To what extent should we adjust for Council Tax when determining local authority allocations (i.e. what assumption should we make on Council Tax Level)?

Fully	52 (23%)
Partially	84 (38%)
Not at all	24 (11%)
Respondents who had no view or did not answer this question	65 (28%)

7.14. The objectives and principles consultation sought views to understand to what extent should Council Tax income be taken into account when determining local authority allocations.

7.15. One hundred and sixty-two respondents left substantive comments, which are summarised in the following paragraphs.

7.16. There were contrasting comments on Council Tax equalisation. Those in favour of full equalisation argued that lower equalisation penalises areas with higher deprivation or lower taxbase (32, 20%). Nineteen respondents (12%) argued for full equalisation to ensure fair distribution of resources based on need.

7.17. By contrast, thirty-three respondents (20%) argued for partial equalisation of Council Tax when determining local authority allocations. There were a number of arguments made in favour of lower or partial equalisation, including that: it could undermine local discretion and accountability (29,18%); it could be destabilising (17, 10%); and there could be less of an incentive to grow taxbases (26, 16%).

7.18. Details of the government’s proposal of the extent Council Tax should be accounted for are outlined at chapter 6 of the Fair Funding Review 2.0 inviting views on our detailed approach.

8. Resetting the Business Rates Retention System

Question 12: Do you agree Transitional Arrangements should account for a Business Rates Reset? If not, please explain why

Respondents who agreed with the proposal	153 (68%)
Respondents who disagreed with the proposal	22 (10%)
Respondents neither agreeing nor disagreeing with the proposal	19 (9%)
Respondents who had no view or did not answer this question	31 (13%)

8.1. The objectives and principles consultation sought views on the government’s proposal that transitional arrangements should take into account the impact of local authority funding reform as a whole, including a business rates reset.

8.2. One hundred and sixty-four respondents left substantive comments, which are summarised in the following paragraphs.

8.3. The majority of respondents agreed with the proposed approach. Twenty-nine respondents (18%) commented that authorities whose business rates retention income is a high proportion of overall income need particular support through any transitional arrangements. The need to avoid ‘cliff edges’ and authorities having sufficient time to adapt to changes were common themes raised.

8.4. Nine respondents (5%) argued that the reset is overdue, and transitional arrangements should be avoided altogether. Sixteen respondents (10%) favoured a short or limited transition period. Seventeen respondents (10%) noted the need for authorities to feel the benefits of funding reform as quickly as possible and that transitional arrangements should not prevent this.

8.5. Twenty-seven respondents (16%) objected to the proposed full reset, under which no growth accumulated to date is retained into the forthcoming reset period, or proposed that authorities maintain a proportion of locally retained business rate growth after the reset. Twenty-three respondents (14%) suggested that the reset penalises authorities who have experienced growth in rates or noted the need to maintain an incentive and reward for business rates growth in the future.

8.6. Details of the government’s proposed approach are outlined in chapter 7 of the second Fair Funding Review 2.0. The government has also recently consulted on the technical proposals for resetting the business rates.

9. The New Homes Bonus

Question 13: Do you agree or disagree we should enable and encourage local authorities to support housebuilding in their areas through the Local Government Finance Settlement?

Respondents who agreed with the proposal	104 (46%)
Respondents who disagreed with the proposal	63 (28%)
Respondents neither agreeing nor disagreeing with the proposal	25 (11%)
Respondents who had no view or did not answer this question	33 (15%)

9.1. The objectives and principles consultation sought views on the government’s proposal to enable and encourage local authorities to support housebuilding through the local government finance settlement.

9.2. One hundred and seventy-two respondents left substantive comments, which are summarised in the following paragraphs.

9.3. Eighty-six respondents (50%) argued that the New Homes Bonus (NHB) is ineffective and should be discontinued. Thirty-two respondents (19%) argued the current distribution of NHB funding is unfair as it allocates funding towards higher-growth, more affluent areas and not based on need. By contrast, 69 respondents (40%) argued that the NHB, or a similar incentive, should be retained.

9.4. Fifty-three respondents (31%) commented that a house building incentive should be outside the Local Government Finance Settlement, to enable the Settlement to allocate funding based on need.

9.5. Eighty-seven respondents (51%) commented that other outcomes should be rewarded or incentivised if an incentive is retained. Other outcomes suggested included local infrastructure, affordable homes and bringing empty homes back into use.

9.6. The government’s proposal for the New Homes Bonus is outlined at chapter 8 of the Fair Funding Review 2.0 published alongside this summary of responses.

10. Implementing changes and keeping allocations up-to-date

Question 14: What measures should we use to support local authorities to move to their updated funding allocations?

10.1. The objectives and principles consultation sought views on what measures the government should use to support local authorities to move to their updated funding allocations. This question allowed respondents to select from a list which transitional arrangements they wished the government to use. Of the 225 respondents to the consultation, 124 (60%) selected ‘blend in allocations over several years’, and seventy-nine (35%) selected ‘other transitional arrangements’.

10.2. One hundred and sixty-nine respondents left substantive comments, which are summarised in the following paragraphs.

10.3. Whilst there was a consensus from respondents on the need for transitional arrangements, there was disagreement about the pace of transition. Thirty-six respondents (21%) suggested that a 3-year transition period was appropriate, but 31 (18%) said that this was not long enough.

10.4. Forty-two respondents (25%) emphasised that transitional payments should be for a fixed period only, with 7 (4%) arguing against the need for any transitional protections at all, to ensure that those who benefit from the redistribution can be moved to their updated allocations.

10.5. Forty-one (25%) respondents emphasised the importance of sufficient overall funding and stressed that the impacts of reform on service provision and financial sustainability should be carefully monitored and minimised.

10.6. Seventy-eight respondents (46%) were in favour of other transitional measures. Thirty-one respondents (19%) suggested capping or limiting losses. Twenty-five respondents (15%) emphasised the importance of early information about allocations and meaningful engagement, to help authorities plan their budgets. Fifteen respondents (9%) argued for bespoke arrangements for the biggest losers, such as an expanded exceptional financial support process. Several respondents argued for additional Council Tax flexibilities.

10.7. Details of the government’s proposed approach to transitional arrangements and implementation is outlined at chapter 9 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 15: Do you agree we should keep funding allocations up-to-date dynamically by using the most up-to-date data possible? If so, how?

Respondents who agreed with the proposal	156 (70%)
Respondents who disagreed with the proposal	16 (7%)
Respondents neither agreeing nor disagreeing with the proposal	25 (11%)
Respondents who had no view or did not answer this question	28 (12%)

10.8. The objectives and principles consultation sought views on how the government should keep funding allocations as up-to-date as possible, noting the possible trade-off with multi-year certainty. Choices on the frequency of updates, the use of projections within distribution methodology and best way to balance the principles of dynamism and certainty were outlined.

10.9. One hundred and fifty-three respondents left substantive comments, which are summarised in the following paragraphs.

10.10. Seventy-nine respondents (52%) favoured providing updates at the beginning of multi-year settlements, in line with Spending Review cycles, as this would balance the certainty of funding and keeping allocations accurate. By contrast, 17 respondents (11%) favoured annual updates and 6 respondents (4%) called for data to be updated on a rolling basis. Forty-five respondents (29%) called for certainty to be prioritised to give councils stability and the ability to plan financially.

10.11. Twenty-three respondents (15%) supported including projections such as population in the calculation of council needs. Thirteen respondents (9%) supported including projections in calculating council resources. On the other hand, 6 respondents (4%) strongly urged for Council Tax projections to not be used.

10.12. Details of the government’s proposed approach to keeping funding allocations up-to-date is outlined at chapter 9 of the Fair Funding Review 2.0 published alongside this summary of responses.

11. Reviewing demands on local government

Question 16: What are the most excessively burdensome activities or requirements for councils, which if changed, could significantly free up local government capacity?  

11.1. The objectives and principles consultation sought views on the most burdensome activities that local councils are required to fulfil.

11.2. One hundred and seventy respondents left substantive comments, which are summarised in the following paragraphs.

11.3. Ninety-seven respondents (57%) highlighted the need to simplify local government funding, in particular removing ringfencing and prescriptions about how to spend grants, to facilitate good local decision-making.

11.4. Sixty-six respondents (39%) highlighted the current accounting and audit process as being excessively burdensome. Respondents were broadly in favour of the government’s commitment to reform the audit system, and expressed a desire to complete this urgently to allow local authorities to prioritise other services.

11.5. Sixty-four respondents (38%) raised data reporting and monitoring requirements as being excessively burdensome. They highlighted the need to streamline processes to avoid duplication and unnecessary bureaucracy and costs.

11.6. Details of the government’s next steps are outlined at chapters 3 and 10 of the Fair Funding Review 2.0 published alongside this summary of responses.

Question 17: Do you agree with our proposals to reduce the number of grants and New Burdens payments issued to local government?

Respondents who agreed with the proposal	140 (62%)
Respondents who disagreed with the proposal	27 (12%)
Respondents neither agreeing nor disagreeing with the proposal	30 (13%)
Respondents who had no view or did not answer this question	28 (13%)

11.7. The objectives and principles consultation sought views on the government’s proposals to reduce the number of grants, including through consolidating them into the local government finance settlement, and streamlining new burdens payments.

11.8. One hundred and seventy-two respondents left substantive comments, which are summarised in the following paragraphs.

11.9. One hundred and sixty-three respondents (95%) agreed explicitly with the principle of funding simplification. Key reasons for support were: reduced administrative burdens; greater local control over how funding is spent; and more certainty of funding. Eighteen respondents (10%) called for the end of competitive bidding for grants. Forty-two respondents (24%) wanted more clarity on which grants would be rolled-in, and how.

11.10. Fifteen respondents (9%) expressed concerns that rolled-in grants would not be subject to future funding uplifts, and 32 (19%) were concerned funding would be cut as a result of funding simplification. Concerns around the loss of visibility or transparency of individual funding streams were also highlighted by 23 respondents (13%). Fourteen (8%) wanted to ensure some grants for specific services remained, and that some that should remain ringfenced.

11.11. Specifically on the introduction of quarterly new burdens payments, thirty-three respondents (19%) expressed direct support – a number of whom cited reduced administrative burdens as a key benefit.  Sixty-nine respondents (40%) highlighted the importance of ensuring new burdens were fully understood, costed and funded. Several local authorities stated that they wanted more local involvement in how these cost estimates are derived.

11.12. Details of the government’s proposed approach to funding simplification is outlined at chapter 3 of the Fair Funding Review 2.0 published alongside this summary of responses.

12. Sales, fees and charges reform

Question 18: Do you agree or disagree that the government should provide local authorities with greater control over Sales, Fees and Charges? Please provide supporting evidence, considering specific fees where greater control would be of most benefit, and expected impacts on charge-payers.

Respondents who agreed with the proposal	167 (74%)
Respondents who disagreed with the proposal	10 (4%)
Respondents neither agreeing nor disagreeing with the proposal	15 (7%)
Respondents who had no view or did not answer this question	33 (15%)

12.1. The objectives and principles consultation sought views on the proposal to provide greater control over sales, fees and charges to local authorities, and asked respondents to provide evidence in regards to specific fees, and expected impacts on charge-payers.

12.2. One hundred and fifty-seven respondents left substantive comments, which are summarised in the following paragraphs.

12.3. One hundred and sixty-seven respondents (75%) agreed with the proposal. Sixty-five respondents (41%) named specific fees where greater control would be of benefit. The service area most raised was planning, where fees were increased from 1 April 2025 and measures were also introduced in the Planning and Infrastructure Bill allowing authorities to set their own planning fees to cover the costs of the planning application service. Licensing and car parking were also mentioned as service areas where fees could be updated.

12.4. Forty-eight substantive responses (31%) said local authorities should be able to set charges themselves at a local level. Advocates for this approach argued that local authorities know their cost of delivery best and thus are better placed to set the appropriate level of fee than central government. By contrast, 13 (8%) stated that all, or some, fees should be set nationally.

12.5. A number of respondents acknowledged that the approach to fees could differ based on the circumstances of the service area. This may depend on factors such as whether the service operates in a monopoly or open market. Although limited, suggestions were offered for mechanisms to limit impacts on charge-payers, including retaining a level of national control, setting a national baseline or having centrally set conditions.

12.6. Details of the government’s proposed approach to reforming sales, fees and charges is outlined at chapter 11 of the Fair Funding Review 2.0 published alongside this summary of responses.

13. Equalities impacts of the proposals in this consultation paper

Question 19: Do you have any views on the potential impacts of the proposals in this consultation on persons who share a protected characteristic?

13.1. The objectives and principles consultation sought views on the potential impacts of the proposals in the consultation on persons who share a protected characteristic.

13.2. One hundred and two respondents left substantive comments, which are summarised below.

13.3. Twenty-nine respondents (28%) stressed the importance of maintaining the provision public services to protect people with protected characteristics.

13.4. Eleven respondents (11%) agreed that better aligning funding with need would have a positive impact on those with protected characteristics.

13.5. Eight respondents (8%) argued that diverting funding away from some areas would have an unfair negative impact on people with protected characteristics in those communities. Six (6%) highlighted the need for transitional protections to minimise these impacts.

13.6. Twelve respondents (12%) expressed concern about the impact proposed changes will have on rural areas, arguing that rurality has equalities implications due to the higher proportion of older people living in rural communities.

13.7. The government has set out information on the equalities implications of its detailed proposals at chapter 13 of the Fair Funding Review 2.0 published alongside this summary of responses.