Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/325321 
Year of Publication: 
2025
Series/Report no.: 
IFS Report
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
The UK government is consulting on significant reforms to how funding from central government is allocated between English councils. From 2026-27, there will be a new system for allocating funding between councils, which will take account of new official assessments of councils' spending needs and their relative abilities to raise revenues themselves via council tax. Changes will be phased in over three years to ease the transition, with funding floors in place to limit losses for those receiving less funding under the new system than currently. These reforms are welcome: for arguably 20 years, England has lacked a rational system for allocating funding between councils. But after so long without such a system, reintroducing one will mean a significant redistribution of funding around the country. And there are different options for key elements of the system, which could have significant effects on the financial impacts of the final package of reforms. This report therefore analyses the potential impact of the proposed reforms across councils, and how this will depend on choices the UK government makes about several key elements of the new system. It can be read in conjunction with our formal response to the government's consultation. Because key elements of the system are still being consulted upon, and the government plans to take account of new data when calculating the final funding allocations for councils, the figures in this report should be taken as indicative of general patterns and tradeoffs, rather than as precise forecasts.
Subjects: 
Government finances and spending
Devolution
Government spending
Local government finance
Geography
Persistent Identifier of the first edition: 
ISBN: 
978-1-80103-230-8
Document Type: 
Research Report

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