Disappointment over impact of funding reforms

COUNCIL HIGHLIGHTS 'CRITICAL' PERIOD FOR FINANCES

- By STUART ARNOLD

A COUNCIL says the Government's 'fairer funding' reforms which will change the way local authorities are financed are not as beneficial as had been hoped for.

A Redcar and Cleveland Council cabinet report providing a first quarter financial update for 2025/26 said there would be a positive benefit, but “not to the level that was initially hoped.”

When Labour was elected last year they pledged improvements to the system of funding after complaints from Northern councils among others in particular. The argument partly goes that with council tax revenue making up an ever greater proportion of council funding, councils in more deprived areas - such as Redcar and Cleveland - which have a lower tax base due to more properties being in lower paying bands end up losing out to wealthier areas.

Current projections based on initial analysis of proposals subject to consultation show that the council will receive £4m in central government funding over the next three years, increasing to £8m in 2027/28 and £12m in 2028/29.