Funding of local government 2021 to 2022: process overview

Overview of the process to determine the local government finance settlement for 2021 to 2022. The figures used are set out in Finance Circular 5/2021, as agreed by Parliament. The publication relates to general funding, and excludes any additional COVID-19 funding provided over the last year.

What information was used to calculate the allocations?

Each service area had a different funding formula. So, for example

  • The formula for street lighting distributed £60 million. It was shared out in proportion to the total length of roads in urban areas within each authority.
  • The formula for Planning & Economic Development distributed £98 million. It was shared out partly in proportion to population, and partly in proportion to deprivation levels, with an extra allocation for island populations.

The formulae used the latest data and often took account of deprivation or rurality. Island populations were usually given a 10 per cent uplift because of their additional costs.

Sometimes councils were given a fixed amount each as part of the formula. In a few cases funding was decided on the basis of bids for funding.

How much of the formula was distributed based on population or pupil numbers - 49%

Summary of the 110 different indicators used in the funding formula
Pie chart showing the proportions distributed on different indictors (broad categories)
Summary of the data used to distribute the 2021-22 settlement
Illustration showing the amounts distributed on different indicators (more detailed categories)



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