What consideration has the Minister given to reviewing the funding formula for local governments, given that they hold £2.75 billion in usable reserves?
Answered by Minister for Finance and Local Government | Answered on 14/09/2023
A local authority’s reserves will have been built up over several years as a result of decisions on budgets, service delivery and council tax levels as well as appetite for risk. However, as reserves can only be used once there would be a risk of introducing a greater amount of year-on-year variation into the Settlement. If local government collectively wished to explore the pros and cons and practicalities of taking account of reserves within the formula, then the technical sub-group can be asked to do so.