Why we need a fairer funding formula

Wokingham Borough Council receives less core revenue support from central government, per head of population, than any other English council with its range of responsibilities.

Very limited government revenue support reflects the data showing Wokingham to be a relatively wealthy borough.  

But the current allocation of government money fails to recognize that demand for and the costs of providing adult and children’s social care are rising everywhere, not just in those council areas where many people face financial hardship.  In Wokingham, social care now accounts for nearly 70% of our total spending.

Because we are deemed a wealthy borough, governments, rather than give us more money, have expected us to increase the council tax to cover our costs. But even when raised to the level of the cap set by ministers, the council tax produces nowhere near enough money to pay for all our services.  With costs rising and our income not keeping pace, council finances are being severely squeezed.

What Wokingham needs is fairer funding from central government to help meet the true costs of delivering adult and children’s social care.

We are not asking for a radical shift, just a reasonable adjustment.  Councils that serve areas where large numbers of people are struggling financially should of course receive more help from central government than councils that serve areas with smaller numbers of people in financial hardship. 

But making that the only measure for determining the distribution of central government support ignores the impact of increasing demand, increasing complexity, and increasing cost of providing social care to the frail elderly and disabled adults and children.  

Wokingham, to be sure, is in a stronger financial position than many councils.

The difficult decisions the current administration have made to save money or generate income have helped keep the council’s finances afloat.  We have also called on earmarked reserves created to mitigate the risk involved in various council activities. In a limited number of cases, as risk diminishes, we can safely release earmarked reserves to ease the financial pressures on the council. 

Using earmarked reserves, however, is something we can do only sparingly and for a short time. If we do it too much or for too long, as other councils have discovered, the reserves run down to a dangerously low level.  We are determined not to let that happen in Wokingham.  A broke council can help no one.

With a new government committed to better funding for public services, we will be pressing with renewed vigour for a fairer funding formula, which recognizes the true costs of delivering adult and children’s social care.

We have been briefing the borough’s MPs on the nature of the problem, and how it impacts on Wokingham.  They recognize that a properly funded social care system is not just fair to those who need help, but also eases pressure on the hard-pressed NHS. 

We must all hope that ministers respond positively to our call for a fairer allocation of government revenue support.