Public Bodies & Nationalised Industries
Formula Funding of Local Public Services
HC 1502, Fifty-fifth Report of Session 2010-12 - Report, Together with Formal Minutes, Oral and Written Evidence
- House of Commons - Committee of Public Accounts
- TSO (The Stationery Office)
The report 'Formula Funding of Local Public Services (HC 1502)' from the Committee of Public Accounts, examines existing approaches to formula funding across government, and the principles that should be carried forward to new arrangements.
Government departments distributed £152 billion, one-fifth of all government spending, to local public bodies in 2011-12 based on the three grants considered:
Primary Care Trust Allocations
Dedicated Schools Grant
The Department for Communities and Local Government's (DCLG) Formula Grant
These distribute funding to local public bodies in a range of sectors, including health, education, local government, police and fire and rescue services. However, the formula funding systems are complex, difficult to understand, and have led to inequitable allocations.
For the Dedicated Schools Grant, based mainly on historical spending patterns, per pupil funding for schools with similar characteristics can vary by as much as 40%. Under the Formula Grant, nearly 20% of authorities received allocations which are more than 10% different from calculated needs.
The priorities accorded to different elements of the formulae are judgements which have a direct impact on the distribution of funds. In some cases the basis for the judgement is guided by authoritative, published independent advice. In other cases, the basis for judgement lacks transparency, and external advice lacks status and influence.
Only 4% of respondents to DCLG's consultation supported the current version of the model used to calculate Formula Grant. Some of the data used by departments in calculating relative needs is inaccurate and out of date
Current reviews of formula funding provide opportunities to address the weaknesses identified in this report.
|Format||Paperback||Published||16 Nov 2011|
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