London boroughs are calling for the government to reexamine proposed
changes to the way it assesses need for children’s services, as research
suggests the reforms fail to account for housing poverty when calculating
deprivation and could have a “devastating impact” on budgets.
Joint analysis from the National Children’s Bureau and
Public Alchemy, commissioned by London Councils, found
"serious issues” with the proposed Children and Young People’s Services
(CYPS) relative needs formula and concluded that its robustness and accuracy
are questionable.
London Councils estimates that the overall impact of the
proposed reforms (factoring in all formula changes) mean London boroughs would ultimately receive £700m less than they would under current funding arrangements.
Chair of London Councils, Cllr Claire Holland, said: “We welcome the government’s
intention to reform council funding since this is long overdue, and it is
critical that funding is distributed fairly and efficiently on the basis of
need.
"However, it’s clear there are serious issues with the
proposed children’s services formula, which risks dramatically underestimating
levels of need in London and other parts of the country. This would have a
devastating impact on our ability to deliver vital local services, particularly
for our most vulnerable children and young people.
“A more accurate approach to assessing local levels of need
is in everyone’s interests. It will help create a funding system that is
robust, provides councils with the resources they need and – following 14 years
of structural underfunding – restores long-term financial stability to boroughs
and the wider local government sector.
“The consultation is an essential opportunity to reexamine
the formula, and we are keen to work with the government to develop a model
that is accurate and robust.”
While, outside the capital, London can be perceived as being
financially healthy, in reality boroughs and Londoners are struggling with the
highest rate of poverty in the country (once housing costs are factored in);
with nearly one in four boroughs relying on ‘exceptional financial support’ to
stay afloat - and by far the largest funding gap of any region, with an
estimated funding shortfall of at least £500m this year.
London Councils is urging the government to ensure its Fair
Funding Review 2.0 proposals distribute funding to local authorities fairly and
efficiently on the basis of need. You can read our briefing on the Fair Funding Review 2.0 in full here.
