Four Block Muddle - fundamental flaws in formula funding

With the third year of the current three-year local government finance settlement apparently secure, minds are turning to what comes next - will there be a comprehensive spending review this year? If there is, will it be followed by another three-year settlement? And what will the settlement look like?

London Councils' publication 'Four Block Muddle - fundamental flaws in formula funding' argues that changes made to the formula funding mechanism in 2006-07 have left us with a system that is wholly unsuitable for planning and managing public finance as we go forward in the current economic climate.

Until a new system can be designed, which has the active support of local authorities in every region in England, London Councils is asking that the formula grant system, with all its statistical calculations and funding floors, be frozen at its 2010-11 levels. This would allow the government to swiftly confirm the funding position for 2011-12 bringing back a measure of stability and providing local authorities with the certainty they need to plan ahead in turbulent times.