Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what mechanisms his Department plans to use to monitor the effectiveness of the multi-year Settlement in reducing disparities in funding between more and less deprived local authorities.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
The government is making good on long overdue promises to fundamentally update the way we fund local authorities. We are realigning funding with need by introducing a fairer and evidence-based funding assessment, which will target a greater proportion of central government grant funding towards the most deprived places which need it the most. By 2028-29, we expect that the 10% most deprived authorities in England will see a significant increase in Core Spending Power per head compared to the least deprived.
The new assessment will be based on the most up-to-date data available. Going forwards, we will update the data at the beginning of each multi-year Settlement to balance dynamism with providing certainty and stability over the Settlement period.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, if he will publish an analysis of how the updated deprivation indicators have altered funding allocations to individual councils under the new Local Government Finance Settlement for (a) Hampshire; (b) Hertfordshire; (c) Kent; (d) Surrey; (e) Essex; (f) Oxfordshire; (g) Buckinghamshire; (h) West Sussex; and (i) East Sussex.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
The government published the local government finance policy statement Local government finance policy statement 2026-27 to 2028-29 - GOV.UK and government response to the Fair Funding Review 2.0 on Thursday 20 November, which set out the government’s plans to introduce a fairer and evidence-led system, that will realign funding with need and deprivation.
The government has used the most robust and up to date evidence available. On this basis, we are now using data from the recently published 2025 Indices of Multiple Deprivation in our assessment of need.
We will publish provisional local authority allocations at the upcoming provisional multi-year Settlement in December. Proposals and allocations will be subject to consultation and the usual Parliamentary process.
The government will also include technical annexes for each ‘relative need formula’ – including those which use updated deprivation data – at the provisional Local Government Finance Settlement.
The Ministry of Housing, Communities and Local Government published the English Indices of Deprivation 2025 (IoD25) on Thursday 30th October 2025. All resources can be accessed online here - English indices of deprivation 2025 - GOV.UK.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what mechanisms exist to provide emergency support to councils in instances where their Fair Funding allocation does not cover their costs.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
Through the Fair Funding Review 2.0 reforms and the first multi-year Local Government Finance Settlement in a decade, we are introducing a fairer and evidence-based funding system. These updates will account for local circumstances, including for different ability to raise income locally from council tax. They will also account for the variation in cost of delivering services, including between rural and urban areas. In doing so, we will target a greater proportion of grant funding towards the most deprived places which need it most, ensuring the best value for money for government and taxpayers.
As a result, we expect that councils with social care responsibilities will see their Core Spending Power (CSP) increase in real terms over the multi-year Settlement, with most councils seeing their Core Spending Power increase in cash terms. By 2028-29, we expect that the 10% most deprived authorities will see a significant increase in their Core Spending Power per head compared to the least deprived.
While our reforms move funding to the places where it is most needed, the government recognises the challenging financial context for local authorities as they continue to deal with the legacy of the previous system. The government has therefore confirmed that it will continue to have a framework in place to support those in the most difficult positions. Any council that has concerns about its ability to set or maintain a balanced budget should approach the department in the first instance.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, how the Government ensures that increases in core spending power per head accurately reflect trends in levels of costs for councils in deprived areas.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
Through the Fair Funding Review 2.0 reforms and the first multi-year Local Government Finance Settlement in a decade, we are introducing a fairer and evidence-based funding system. These updates will account for local circumstances, including for different ability to raise income locally from council tax. They will also account for the variation in cost of delivering services, including between rural and urban areas. In doing so, we will target a greater proportion of grant funding towards the most deprived places which need it most, ensuring the best value for money for government and taxpayers.
As a result, we expect that councils with social care responsibilities will see their Core Spending Power (CSP) increase in real terms over the multi-year Settlement, with most councils seeing their Core Spending Power increase in cash terms. By 2028-29, we expect that the 10% most deprived authorities will see a significant increase in their Core Spending Power per head compared to the least deprived.
While our reforms move funding to the places where it is most needed, the government recognises the challenging financial context for local authorities as they continue to deal with the legacy of the previous system. The government has therefore confirmed that it will continue to have a framework in place to support those in the most difficult positions. Any council that has concerns about its ability to set or maintain a balanced budget should approach the department in the first instance.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what (a) variables and (b) indicators are included in the Fair Funding 2.0 formula; how is each factor weighted; and if he will publish the full methodology underpinning Fair Funding 2.0.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
I refer you to the government response to the Fair Funding Review 2.0 The Fair Funding Review 2.0 - GOV.UK published on 20 November. The government will use relative need formulas (RNFs) to assess how much ‘need’ each local authority has in comparison to others for specific services. These formulas are a key part of how local authorities' funding allocations are calculated and, for the first time since 2013-14, they are being updated. This is something the sector has long called for and will enable the government to assess local authorities' relative demand for services more effectively. The formulas are designed to reflect the extent to which local characteristics are likely to influence demand for services. Each RNF is constructed using consistent principles, drawing on data such as demographic indicators and applying statistical techniques to weight variables according to their influence on service demand. The government will include technical annexes for each formula at the provisional Local Government Finance Settlement, which is due for publication this month.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what the evidential basis is for the inclusion of the Remoteness Adjustment within the Area Cost Adjustment of proposed funding formulas.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
On Thursday 20 November, we published the government response to the Fair Funding Review 2.0, which sets out the government’s plan to introduce a fairer and evidence-led funding system. In doing so, we will target a greater proportion of grant funding towards the most deprived places which need it most, ensuring the best value for money for government and taxpayers.
We will apply a remoteness adjustment to the Adult Social Care Formula, but not to formulas more broadly. The government recognised in the last consultation the case in principle for the impact of a remoteness adjustment on costs.
On balance, taking into consideration the available evidence and the views of stakeholders, the government has made a judgement that remoteness should be accounted for when assessing the cost of delivering adult social care services.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what steps his Department is taking to ensure that the inclusion of housing costs in the Indices of Multiple Deprivation does not disadvantage more deprived areas with lower housing costs, particularly those with higher Council Tax rates.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
On Thursday 20 November, we published the government response to the Fair Funding Review 2.0, which sets out the government’s plan to introduce a fairer and evidence-led funding system. The government has used the most robust and up to date evidence available. On this basis, we are now using data from the recently published 2025 Indices of Multiple Deprivation in our assessment of need. The Indices are an Accredited Official Statistic produced by MHCLG.
The government has an important role as an equaliser for local government income, directing funding towards the places that are less able to meet their needs through locally raised income. The government will apply a resource adjustment which accounts for the differing Council Tax raising ability between local authorities.
We are proposing that the resource adjustment achieves the objective of full equalisation. This provides funding in a way that supports local authorities to offer a consistent level of service to their residents.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, when his Department plans to implement Council Tax equalisation as part of proposed funding reforms; and what assessment he has made of the potential impact of those reforms on councils with lower ability to raise local revenue.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
On Thursday 20 November, we published the government response to the Fair Funding Review 2.0, which sets out the government’s plan to introduce a fairer and evidence-led funding system.
As part of this, the government is clear that it has an important role as an equaliser for local government income, directing funding towards the places that are less able to meet their needs through locally raised income. The government will therefore apply a resource adjustment which accounts for the differing Council Tax raising ability between local authorities which will be implemented as part of the 2026-27 Local Government Finance Settlement and will be phased in over three years.
The resource adjustment achieves the objective of full equalisation. This provides funding in a way that supports local authorities to offer a consistent level of service to their residents regardless of their tax base.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, whether his Department has made an assessment of the (a) potential merits of continuing the Recovery Grant within the Local Government Finance Settlement and (b) the criteria used to determine its future inclusion.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
The government introduced the £600 million Recovery Grant in 2025-26 to support those local authorities facing higher need and demand for services, and which are least able to fund their own services through income raised locally.
Following a large number of representations on the importance of this funding, the government confirmed in the local government finance policy statement 2026-27 to 2028-29 on 20 November that we would maintain all existing Recovery Grant allocations from 2025-26 across the multi-year Settlement. The government agrees – after years of funding cuts to local government, in which the most deprived places suffered the most – that the recovery is not over.
We will also provide a Recovery Grant Guarantee to upper tier authorities which were in receipt of the Recovery Grant. This will be capped at £35 million per authority over the multi-year period. These upper tier authorities will see an above real-terms increase, except for where the cap is applied.
We will publish provisional local authority allocations at the upcoming provisional multi-year Settlement in December. Proposals and allocations will be subject to consultation and the usual Parliamentary process.
Asked by: Anneliese Midgley (Labour - Knowsley)
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, what recent assessment his Department has made of the potential impact of the Recovery Grant on local authorities' ability to maintain essential services and introduce new support measures for residents.
Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)
The government introduced the £600 million Recovery Grant in 2025-26 to support those local authorities facing higher need and demand for services, and which are least able to fund their own services through income raised locally.
Following a large number of representations on the importance of this funding, the government confirmed in the local government finance policy statement 2026-27 to 2028-29 on 20 November that we would maintain all existing Recovery Grant allocations from 2025-26 across the multi-year Settlement. The government agrees – after years of funding cuts to local government, in which the most deprived places suffered the most – that the recovery is not over.
We will also provide a Recovery Grant Guarantee to upper tier authorities which were in receipt of the Recovery Grant. This will be capped at £35 million per authority over the multi-year period. These upper tier authorities will see an above real-terms increase, except for where the cap is applied.
We will publish provisional local authority allocations at the upcoming provisional multi-year Settlement in December. Proposals and allocations will be subject to consultation and the usual Parliamentary process.