11-08-2025
Today’s analysis from the Institute for Fiscal Studies (IFS) underscores many of CIPFA’s long-held concerns about the fairness, complexity and long-term viability of the local government finance system in England.
CIPFA welcomes the government’s intention to reintroduce a more transparent, needs-based formula for allocating funding, and recognises the IFS’s conclusion that the proposed reforms would better align funding with councils’ assessed spending requirements. However, the scale of change involved will bring significant challenges.
CIPFA Director of Public Financial Management Iain Murray, said:
“CIPFA supports the direction of the government’s proposed funding reforms and agrees with the IFS that aligning funding with spending needs is essential for long-term sustainability.
“But as the IFS report makes clear, the legacy of nearly two decades without reform means that adjustment will be painful for some authorities. A phased approach is prudent, but the government must be prepared to go further in protecting councils at risk of service failure.”
“Change must be iterative. We cannot allow the system to stagnate again. Regular updates to funding formulas, clear and consistent data and continued engagement with the sector are all vital.”
CIPFA echoes the IFS’s warning that reforming the funding formula is only part of the solution. Addressing cost pressures, redesigning services, and making better use of technology will be key to the future sustainability of local government.
CIPFA will respond in full to the government’s consultation by the 15 August deadline.
Notes to editor
- Read IFS major reforms to English council funding will create big winners and losers over next three years.
- For further information or comment, please contact the CIPFA Press Office: press@cipfa.org.