Council could lose £18m in proposed funding reform.
East Sussex County Council says it could lose up to £18 million if government funding reforms go ahead.
On Tuesday, councillor Nick Bennett, the authority’s lead member for resources and climate change, approved a consultation response to government proposals known as the Fair Funding Review 2.0 (FFR2.0).
The government claims that the proposals aim to simplify the funding process and change the way council funding is calculated.
According to the Local Democracy Reporting Service, council officers believe the reforms are “flawed” and could cost East Sussex between £12 million and £18 million by 2028/29.
The changes would include the government using “assessed need” as one of the criteria to determine the final amount of money councils receive, with the figure adjusted to reflect their specific circumstances.
The council claims it will lose out because the adjustment is based on median wages, which are slightly lower than the national average.
It stated that this approach would be ineffective because social care costs are not comparable to local median wages.
The government is also proposing an additional funding assessment criterion, the LDRS reports, which take into account the amount of council tax local governments receive.
However, county council officers argue that this approach is “grossly unfair” and “does not reflect reality” because not every household pays its council tax bill, and not every council charges £2,000 annually.
The deduction would “significantly penalise” East Sussex County Council, which has a “relatively large council tax base.”
In its response to the consultation, the council says the government should “rethink” how it calculates this deduction or “give local authorities more control over how they set their council tax bills”.
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