How were councils protected against large changes in their allocation?
After we had used the funding formula to calculate each council's share, we compared the allocations with the previous year. Naturally some councils received a larger percentage increase than others. We then set a lower limit on the percentage reduction that they were allowed. The limit is called 'the Floor'.
To do this, first we worked out the average percentage change, comparing all bar a few areas of the formula. We then set the Floor slightly below that average. It meant that in 2022-23 councils were allowed, at worst, a 0.42 per cent reduction in their regular funding.
Where the funding formula had given councils an increase greater than the Floor, they pay into a pool. This pool is then distributed to the other councils to bring them up to the Floor.
Number of councils who will receive additional funding from 'the Floor' - 9
For 2022-23 the funding formula gave an additional £116 million to certain councils, compared to if everyone had just received the same percentage increase. Once we had applied the Floor, they kept £7 million of it.
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