Getting to grips with England's formula for local authority support

Abstract

A Department for Communities and Local Government formula is currently granting over 20 billions of pounds sterling to the 456 local authorities (LAs) of England. This article analyses the remarkable sensitivity of the formula to coordinated changes in the small allocations to Wokingham and Richmond upon Thames (that do not change the total grant)—some big LAs experience large absolute changes in funding while small ones may undergo large percentage changes. This violation of rational principle by a world leader in the development of resource allocation formulae makes a strong case for thoughtful interdisciplinary review of any formula.

Keywords:

• Formula sensitivity
• local authorities
• relative needs
• resource allocation
• revenue support grant

Acknowledgement

This article could not have been written without the generous support, advice and encouragement of Alex Gibson of the University of Plymouth, UK.

Notes

*[email protected]

Additional information

Notes on contributors

Mervyn Stone

Mervyn Stone is emeritus professor of statistics at University College London. UK.