23-06-2025
Responding to the Ministry of Housing, Communities and Local Government’s (MHCLG) consultation on the Fair Funding Review 2.0 and Council Tax Reform, the Chartered Institute of Public Finance and Accountancy (CIPFA) welcomes signs of progress but warns that key structural issues remain unresolved.
CIPFA Director of Public Financial Management Iain Murray, said:
“We welcome the Government’s recognition that local government finance needs reform. The commitment to address long-standing disparities in funding allocations and simplify the complex patchwork of grants is a positive step toward greater fairness and transparency.
“We recognise that any redistribution will inevitably mean some areas gain while others lose. It is essential that reforms are implemented with care, using robust data and adequate transitional mechanisms to protect those councils that may be disproportionally affected.
“Finance professionals across the sector will be encouraged by proposals such as the confirmed return to a multi-year settlement and the consolidation of some funding pots — both of which provide clearer ground for planning and accountability.
“However, the government has yet to address some of the most fundamental structural pressures facing local government. Notably, the extension of the statutory override for SEND (special educational needs and disabilities) high-need deficits to 2028 no longer serves its initial purpose of providing breathing space to implement meaningful reform. That opportunity has passed.
“Without urgent solutions to both existing and future SEND deficits, those councils grappling with unsustainable high needs costs and rapidly growing cumulative deficits may, at best, be forced to make further reductions in essential services, and at worst, risk declaring themselves effectively bankrupt.”
Notes to editor
For further information, please contact the CIPFA Press Office press@cipfa.org.
The government published its response to the consultation on Local Authority Funding Reform on 20 June 2025, ahead of a proposed multi-year settlement from 2026–27.