T he first and perhaps most important fact about the fair funding review is simply that it is here. For too long, councils have laboured under a broken finance system. Ministers promised to address this, and civil servants have delivered. On schedule. This is to be commended.
I was a bit surprised, though, to see the consultation officially framed as the fair funding review 2.0. As a way of signalling the future, this feels – dare I say – a little dated. I recall a period around 2009 when it felt obligatory for every policy paper to be titled ‘something 2.0', I may even have written a paper called ‘Local Government 3.0'. Nothing dates as fast as the future. This framing also inevitably invites comparison with what we must now call the fair funding review 1.0. Is that to suggest this is an evolution rather than a reset? Certainly, there are clear echoes of the work paused back in 2018.
Within the consultation, there is much to like. The Local Government Information Unit (LGiU) campaigned for multi-year financial settlements, an end to ‘begging bowl' funding, and a new funding formula aligned to need. Ministers have delivered on their promises in this regard.
The ambition to create a funding formula that takes ‘account of the different needs and costs faced by local authorities in urban and rural areas and the ability of individual local authorities to raise council tax' is hard to argue with.
I'll leave it to more expert commentators to assess whether the complex formula set out in the consultation achieves this goal – or indeed whether it is even possible to do so without knowing how much money is actually being allocated.
While the distribution of money will – rightly – be the main focus (it is what the consultation is about, after all), I think it is also worth drawing attention to what it tells us, or doesn't tell us, about other policy issues.
The consultation makes it clear mayors will be funded from the local government settlement and from a share of business rates. But increasingly, mayors do not seem to see themselves as part of local government. There are issues here that need to be resolved.
First, on reorganisation: the final year of the proposed three-year settlement will also be the first year of new unitary councils, if the Government's reorganisation timelines are met. That is why councils are invited to consider how the allocation formula will map onto future councils as well as current ones. But of course, that is difficult given we do not yet have ministerial direction on what those new councils will actually be.
There has been a discernible wobble in reorganisation landing over recent weeks, with anxieties about councils' ability to agree proposals and the Government's ability to respond to them in time.
Last week, ministers reaffirmed their commitment to the process and to the September and November deadlines as ‘anchor points' within it. So it is no surprise councils are being asked to model future structures. For many, this will be challenging until more is known.
The consultation also has quite a lot to say about mayors. We are told they will drive growth and represent their place on the national stage. This is familiar from existing combined authorities. But the consultation also refers to the mayor's role in co-ordinating local services. As yet, we have no clear sense of how mayoral strategic authorities will do this – or how they will work with their constituent authorities, whatever those end up being, to drive a collective approach to delivery.
The consultation makes it clear mayors will be funded from the local government settlement and from a share of business rates. But increasingly, mayors do not seem to see themselves as part of local government. There are issues here that need to be resolved.
There is a brief reference affirming the Government's commitment to a National Care Service and to considering the recommendations from Baroness Louise Casey's review of social care. But what actually is the plan for a National Care Service?
Is this being developed in a lab somewhere in the Department of Health and Social Care? How will it interact with local authorities and with mayoral strategic authorities? How will we avoid the pitfalls that have undermined this policy in Scotland? What if Louise Casey recommends against a National Care Service? Again, these broader policy signals raise more questions than they answer.
At the heart of all this is a strategic question about the function and shape of the local state. What outcomes do we want from it? How should it be structured to achieve those? How do we tie together the component parts into a coherent system that has intent and direction?
The Government has set a lot of processes in motion: devolution, reorganisation, funding reform. The challenge is to make sure they all cohere. That is not to say it is the Government's job to design the system for us. But it is a collective responsibility we all need to shoulder. And it is the bigger picture that councils should bear in mind as they respond to this consultation.
Jonathan Carr-West is chief executive of the LGiU
