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.

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.