Latest news with #fundingreforms
BBC News
5 days ago
- Business
- BBC News
East Sussex County Council could lose £18m in funding reforms
East Sussex County Council says it could lose up to £18m if government funding reforms move Tuesday, councillor Nick Bennett, the authority's lead member for resources and climate change, signed off a consultation response to government proposals known as the Fair Funding Review 2.0 (FFR2.0).The government says the proposals aim to make the funding process simpler and change how council funding is officers say the reforms are "flawed" and could see East Sussex lose between £12m and £18m by 2028/29, according to the Local Democracy Reporting Service (LDRS). The changes would see the government use "assessed need" as one of the criteria to determine the final amount of money councils receive by adjusting the figure to reflect their specific council says it would lose out as the adjustment is based on median wages, which are slightly lower than the national said this approach would not work as costs of social care are not aligned with local median wages. The government is also proposing another funding assessment criteria, the LDRS reports, which takes into account the amount of council tax local authorities receive. But county council officers say this approach is "grossly unfair" and "does not reflect reality" as not every household pays its council tax bill and not every council charges £2,000 per Sussex County Council says the deduction would "significantly penalise" the authority as it has a "relatively large council tax base".In its consultation response, the council says the government should "rethink" how it calculates this deduction or "give local authorities more control over how they set their council tax bills".
Yahoo
06-08-2025
- Business
- Yahoo
‘One in four councils could lose money' under Government's funding proposals
Around a quarter of councils in England could lose money under the Government's proposed reforms to how local authorities are funded, analysis has found. A report from the Institute for Fiscal Studies (IFS) said the changes would create big 'winners and losers' as ministers attempt to address perceived unfairness in levels of core funding across the country. Sir Keir Starmer's own council, Camden in north London, will be hit by the reforms when taking inflation into account, the IFS added. The think tank said Camden, along with other inner London boroughs including Westminster, will have less money to spend on services even if they increase council tax by the maximum amount allowed. Whitehall will provide a minimum level of funding, a so-called funding floor, for council leaders during the changes, but the IFS said overall cash for inner London town halls would be 11-12% lower in 2028-29 in real terms. The paper said: 'Around one in four councils would see real-terms falls in overall funding under the Government's proposals, with around 30 on the lowest funding floors seeing real-terms cuts of 11–12%. Conversely, another one in four councils would see real-terms increases of 12% or more.' The changes, which will come into effect from next year, are being consulted on by ministers. The Government plans to create a new methodology to assess local authority needs relatively and factor in population and deprivation. It will also assess need for adult and children's services. Overall spending will fall for 186 councils and rise by the same total sum for 161. One in 10 will see a fall in overall funding, while one in 10 will see an increase of 10% or more. The overall Government spend on local authorities will not change. The changes will be phased in across three years, from 2026/27 to 2028/29. Kate Ogden, co-author of the IFS report and a senior research economist with the think tank, said: 'England has lacked a rational system of local government funding for at least 12 years – and arguably more like 20. It is therefore welcome that the nettle of funding reform is being grasped, and some councils will benefit substantially under the new system. 'But the changes will sting for those councils that are assessed to currently receive too high a share of the overall funding pot, and so which lose out from moves to align funding with assessed spending needs.' The proposals are criticised in the report as 'not particularly redistributive to poor, urban areas of England'. It cites South Tyneside and Sunderland councils being among those to lose out from the reforms as slow population growth is accounted for. The report added: 'It is somewhat surprising that, on average, councils in the most deprived 30% of areas would see very similar changes in overall funding over the next three years to those for councils in the middle 40% of areas.' It noted that rural areas, which feared being badly hit by changes, will benefit from a 'remoteness adjustment' which will compensate areas with higher needs due to being far from large towns. London will gain the least, with a cash-terms increase in funding of 8% in the next three years. Analysis by the London Councils collective has highlighted the risk of the funding 'dramatically underestimating' needs for local services in parts of the capital. It noted the city has the highest rate of poverty in the country when housing costs are factored in. Outside the capital, the East Midlands (22%) and Yorkshire & the Humber (19%) are set to see the biggest increases in funding, with the South East set to see the smallest at 13%. However, the proposals have been criticised by youth charity the National Children's Bureau, which said it was 'significantly concerned' about the way the Government plans to work out needs for children's services. Ms Ogden added: 'The Government should consider giving highly affected councils which currently have low council tax rates greater flexibility to bring their council tax bills up to more typical levels to offset funding losses. 'More generally, reform of council funding allocations is just one part of the financial sustainability puzzle. Efforts to reduce demands on, and the cost of providing, local services through reform and the use of new technology will also be vital.' A spokesperson for the Ministry of Housing, Communities and Local Government said: 'The current, outdated way in which local authorities are funded means the link between funding and need for services has broken down, leaving communities left behind. 'That's why we are taking decisive action to reform the funding system so we can get councils back on their feet and improve public services, with the IFS recognising that our changes will better align funding with councils' needs.'
The Independent
06-08-2025
- Business
- The Independent
‘One in four councils could lose money' under Government's funding proposals
Around a quarter of councils in England could lose money under the Government's proposed reforms to how local authorities are funded, analysis has found. A report from the Institute for Fiscal Studies (IFS) said the changes would create big 'winners and losers' as ministers attempt to address perceived unfairness in levels of core funding across the country. Sir Keir Starmer's own council, Camden in north London, will be hit by the reforms when taking inflation into account, the IFS added. The think tank said Camden, along with other inner London boroughs including Westminster, will have less money to spend on services even if they increase council tax by the maximum amount allowed. Whitehall will provide a minimum level of funding, a so-called funding floor, for council leaders during the changes, but the IFS said overall cash for inner London town halls would be 11-12% lower in 2028-29 in real terms. The paper said: 'Around one in four councils would see real-terms falls in overall funding under the Government's proposals, with around 30 on the lowest funding floors seeing real-terms cuts of 11–12%. Conversely, another one in four councils would see real-terms increases of 12% or more.' The changes, which will come into effect from next year, are being consulted on by ministers. The Government plans to create a new methodology to assess local authority needs relatively and factor in population and deprivation. It will also assess need for adult and children's services. Overall spending will fall for 186 councils and rise by the same total sum for 161. One in 10 will see a fall in overall funding, while one in 10 will see an increase of 10% or more. The overall Government spend on local authorities will not change. The changes will be phased in across three years, from 2026/27 to 2028/29. Kate Ogden, co-author of the IFS report and a senior research economist with the think tank, said: 'England has lacked a rational system of local government funding for at least 12 years – and arguably more like 20. It is therefore welcome that the nettle of funding reform is being grasped, and some councils will benefit substantially under the new system. 'But the changes will sting for those councils that are assessed to currently receive too high a share of the overall funding pot, and so which lose out from moves to align funding with assessed spending needs.' The proposals are criticised in the report as 'not particularly redistributive to poor, urban areas of England'. It cites South Tyneside and Sunderland councils being among those to lose out from the reforms as slow population growth is accounted for. The report added: 'It is somewhat surprising that, on average, councils in the most deprived 30% of areas would see very similar changes in overall funding over the next three years to those for councils in the middle 40% of areas.' It noted that rural areas, which feared being badly hit by changes, will benefit from a 'remoteness adjustment' which will compensate areas with higher needs due to being far from large towns. London will gain the least, with a cash-terms increase in funding of 8% in the next three years. Analysis by the London Councils collective has highlighted the risk of the funding 'dramatically underestimating' needs for local services in parts of the capital. It noted the city has the highest rate of poverty in the country when housing costs are factored in. Outside the capital, the East Midlands (22%) and Yorkshire & the Humber (19%) are set to see the biggest increases in funding, with the South East set to see the smallest at 13%. However, the proposals have been criticised by youth charity the National Children's Bureau, which said it was 'significantly concerned' about the way the Government plans to work out needs for children's services. Ms Ogden added: 'The Government should consider giving highly affected councils which currently have low council tax rates greater flexibility to bring their council tax bills up to more typical levels to offset funding losses. 'More generally, reform of council funding allocations is just one part of the financial sustainability puzzle. Efforts to reduce demands on, and the cost of providing, local services through reform and the use of new technology will also be vital.' A spokesperson for the Ministry of Housing, Communities and Local Government said: 'The current, outdated way in which local authorities are funded means the link between funding and need for services has broken down, leaving communities left behind. 'That's why we are taking decisive action to reform the funding system so we can get councils back on their feet and improve public services, with the IFS recognising that our changes will better align funding with councils' needs.'
Yahoo
16-07-2025
- Business
- Yahoo
EU sets stage for big battle over long-term budget
The European Commission will kickstart two years of tense negotiations when it unveils its proposal Wednesday for the EU's long-term budget including funding reforms that risk renewed confrontation with farmers. EU chief Ursula von der Leyen has to balance a growing list of priorities including bolstering the bloc's security, ramping up Europe's competitiveness to keep up with US and Chinese companies, countering climate change and paying debts due from 2028. And all of this against a backdrop of soaring trade tensions with the European Union's biggest commercial partner, the United States. The previous 2021-2027 budget was worth around 1.2 trillion euros ($1.4 trillion) and made up from national contributions -- around one percent of the member states' gross national income -- and money collected by the EU such as customs duties. One of the biggest challenges ahead will be over the size of the budget, as the EU's biggest -- and richest -- countries want to avoid paying more. But unlike in the previous budget, the EU has debts due from the Covid pandemic, when the bloc teamed up to borrow 800 billion euros to support the continent's economy. These are estimated to cost 25-30 billion euros a year from 2028. The European Parliament has made it clear that an increase will be necessary. "We believe that the union cannot do more with the same amount or less. So we believe that in the end, an increase of the budget will be unavoidable," said Siegfried Muresan, the EU lawmaker who will lead negotiations on behalf of parliament. The commission plans to propose new ways of raising money including taxes on large companies in Europe with annual net turnover of more than 50 million euros, according to a draft document seen by AFP. - Funding farmers - Another area of fierce debate will be the large farming subsidies that make up the biggest share of the budget, known as the common agricultural policy (CAP). Brussels plans to integrate it into a new major "national and regional partnership" fund, according to another document -- which farmers fear will mean less support. The CAP accounts for almost a third of the current multi-year budget -- around 387 billion euros, of which 270 billion euros are directly paid to farmers. Centralising "funding into a single fund may offer some budgetary flexibility, but it risks dissolving" the CAP with "fewer guarantees", pan-European farmers' group Copa-Cogeca has said. Farmers will put pressure on the commission with hundreds expected to protest outside the building in Brussels on Wednesday. That will raise fears in Brussels after protests broke out last year across Europe by farmers angry over cheap imports, low margins and the burden of environmental rules. Muresan, who belongs to the biggest parliamentary group, the centre-right EPP, urged the same level of funding for the CAP, "adjusted for inflation". The commission has, however, stressed the CAP will continue with its own rules and financial resources, especially direct aid to farmers. Brussels could also propose reviewing how CAP payments are calculated to better target beneficiaries. For example, the commission wants to cap aid per hectare at 100,000 euros but this would be a thorny issue unlikely to garner much support. - More money - Facing new costs and competing challenges, the EU wants to tap new sources of funding -- fast. In one document, the commission suggests the bloc take a share from higher tobacco excise duties and a new tax on non-recycled electronic waste. Such a move, however, is "neither stable nor sufficient", according to centrist EU lawmaker Fabienne Keller, critical of giving new tasks to Brussels "without the necessary means to accomplish them". Wednesday's proposal will launch difficult talks over the budget and is expected to "as usual, end with five days of negotiations" between EU capitals, an official said. adc-raz/ec/rlp/tc Sign in to access your portfolio
The Guardian
27-05-2025
- Business
- The Guardian
Gordon Brown: Delaying child poverty reforms until Autumn budget is ‘the right call'
Gordon Brown has publicly backed the government's decision to delay its flagship child poverty strategy until the autumn, arguing ministers need to take the time to secure funding for reforms that could lift hundreds of thousands of children out of hardship. The former prime minister said Keir Starmer and Rachel Reeves' decision to wait until the autumn budget was 'the right call', despite some criticism from Labour MPs who think the delay signals a lack of urgency on a critical issue. Experts have warned 100 children are pulled into poverty every day by the two-child benefit limit – a measure campaigners and a number of MPs hope will be scrapped as part of the strategy. While the delay has sparked anxiety among many in the parliamentary Labour party, there is a significant number of MPs who say they agree the government should take the time to find the money to make a bold offer on child poverty. Brown signalled the autumn budget should include taxes on gambling and banking that would help raise the money needed to lift hundreds of thousands of children out of poverty. Writing for the Guardian, Brown said: 'I know from my 10 years as chancellor that a public spending statement – which is not like a budget, where tax and spending announcements are made together – will not be able to undo the scale of the damage done to 4.5 million children now in poverty. 'Only a budget – when, for example, a gambling or a banking levy can be announced, neither of which would break a single election promise – can generate the £3bn that can take nearly half a million children out of poverty to meet the election promise 'to end mass dependence on emergency food parcels', to honour the mandate given to the child poverty taskforce to ensure a 'reduction in this parliament' and to ensure that, by investing in children, the coming decade can be the 'promised decade of renewal'.' Last week, the Guardian revealed No10's decision to delay the strategy, which came as ministers continued to face growing pressure to scrap the two-child benefit cap – which Brown called the 'most cost-effective way to take 35,000 children out of poverty immediately and rescue 700,000 from deep poverty'. The policy is still under active consideration, with the Guardian reporting that Starmer has privately said he wants to leave the option of scrapping it on the table. However, sources said Morgan McSweeney, Starmer's chief of staff, was opposed to the move, arguing the public viewed it as an issue of fairness. Despite this, on Tuesday, the education secretary, Bridget Phillipson gave the strongest hint yet that ministers intend to end the two-child benefit limit. Sign up to Headlines UK Get the day's headlines and highlights emailed direct to you every morning after newsletter promotion She said of charities who have long been campaigning for an end to the restriction: 'We hear them … We want to make this change happen, and it will be the moral mission of this Labour government to ensure that fewer children grow up in poverty.' Asked if the prime minster endorsed her words, his spokesperson said: 'Of course, the secretary of state is speaking for the government.' A senior backbencher told the Guardian it was 'sensible' for the government to delay the strategy so it could be fully costed. Another Labour backbencher warned ministers should be 'big and bold', warning they will not be forgiven if child poverty has increased over this parliament. It comes after Labour grandee David Blunkett warned Starmer's government that the country was facing a 'toxic mix' of insecure work, poor pay and a collapse in skills training that had left families trapped in hardship. Blunkett, who helped create the Sure Start programme under the last Labour government, said the dismantling of early years services had stripped vulnerable families of basic support. 'It felt to communities like government wanted to come to them on their terms,' he said. 'That's what's been lost.' Last week the Guardian reported the child poverty taskforce is likely to recommend the return of the early years service Sure Start, although there are questions over how it could possibly be funded.
