Author: Vine, Jim.
Since 2013/14, local government in England has received funding allocations on the basis of a set of funding formulas that were last recalculated around 2012, using data from that period and earlier. We have reproduced the funding allocation mechanism in a different format (the computer language R), and used our reimplementation to examine various features of the mechanism. We identify various problems with the allocation model and find that partially updating the data in the model results in substantial deviations from the funding currently allocated under the model. Drawing lessons from the problems identified in the 2013/14 allocation mechanism, a set of criteria are proposed for the behaviour of any future mechanism, and tests are described to support assessments of whether these criteria are being met.
Read the full working paper here: Local government Formula Funding in England since 2013/14: Lessons for future funding models