Needs-based Funding Formula

Oral Answers to Questions — Communities and Local Government – in the House of Commons at 12:00 am on 27th February 2017.

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Photo of James Heappey James Heappey Conservative, Wells 12:00 am, 27th February 2017

What plans he has to revise the needs-based funding formula for local government finance.

Photo of Sajid Javid Sajid Javid The Secretary of State for Communities and Local Government

As it is nearly a decade since the current needs assessment formula was looked at thoroughly, we are currently undertaking a fair funding review to consider how to introduce a more up-to-date, more transparent and fairer formula.

Photo of James Heappey James Heappey Conservative, Wells

I warmly welcome the review that the Secretary of State has announced. I share his enthusiasm for it, and that of councils in Somerset. What will be its likely structure, and what is the minimum time that it may take to complete?

Photo of Sajid Javid Sajid Javid The Secretary of State for Communities and Local Government

As my hon. Friend will know, I was in Somerset only last week, helping to launch the excellent election manifesto for that great county, and fair funding was one of the issues that came up. Our plan is that the new formula will determine the baseline funding allocations as we implement the 100% business rates retention programme which is planned for 2019-20.

Photo of Edward Garnier Edward Garnier Conservative, Harborough

My right hon. Friend will know that one of the local authorities in my constituency, Oadby and Wigston borough council, is in dire financial straits. It has run itself incompetently, with the result that, with a revenue budget of £7 million or £8 million a year, it now plans to have an annual deficit of about £1.5 million. That is small in the great scheme of things, but in local terms it is hugely important. I know that my right hon. Friend and the Under-Secretary of State for Communities and Local Government, my hon. Friend Mr Jones, have been looking into the matter, but will my right hon. Friend take a special interest in the council’s management to ensure that council taxpayers are not being mistreated?

Photo of Sajid Javid Sajid Javid The Secretary of State for Communities and Local Government

I share the concerns of my right hon. and learned Friend. He has written to me and talked to me and my hon. Friend the Minister with responsibility for local government about this, and I can assure him that we are both taking a special interest in this.