Councillor Stephen Shaw, Deputy Leader and Portfolio Holder for Finance and Property, approved the submission of a response to the government's consultation on the Fair Funding Review 2.0¹. Authority was delegated to the Executive Director for Resources to finalise and submit the response. This decision was made due to the short consultation period and the need for further input from stakeholders.

Fair Funding Review 2.0 Consultation

The main item discussed was the Fair Funding Review 2.0, a government consultation on reforming local authority funding. Councillor Shaw approved the submission of a response to the consultation, delegating authority to the Executive Director for Resources to finalise and submit it.

The consultation, published by the Ministry for Housing Communities and Local Government on 20 June 2025, seeks views on the approach to local authority funding reform through the Local Government Finance Settlement from 2026 to 2027. The public reports pack notes that the consultation covers:

• determining local authority funding allocations
• the approach to consolidating funding
• measuring differences in demand for services and the cost of delivering them
• measuring differences in locally available resources
• the New Homes Bonus²
• transitional arrangements and keeping allocations up-to-date
• the long-term approach to the business rates retention system³
• devolution and wider reforms, including how the government can bring Strategic Authorities closer to the Local Government Finance Settlement
• ways the government can reduce demands on local government to empower them to deliver for communities
• sales, fees and charges reform

The decision was deemed urgent because of the short consultation period, which required a response by 15 August 2025. The consent to urgency form notes that input from stakeholders and other public sector interest groups was not expected until 8 August, leaving only three full working days to finalise the Warwickshire specific response.

The Warwickshire County Council response is based on sector-wide responses developed by bodies such as the Society of County Treasurers and the County Councils Network, supplemented by responses to matters that could potentially have a direct impact on Warwickshire.

The response highlights several key concerns:

• Financial challenges: All county councils are under significant financial strain, with spending needs rising faster than other types of councils. The funding provided at the Spending Review and the proposals in this consultation may not close the funding gap.
• SEND deficits: Special Educational Needs and Disabilities (SEND) deficits are a significant pressure, with national cumulative deficits forecasted to reach £6 billion by March 2026. The council estimates that if it were funded at the national average per pupil, its annual deficits could reduce significantly.
• Council Tax Equalisation: The council strongly disagrees with the objective of full council tax equalisation and believes the government should implement a lower level through partial equalisation.
• Projections: The council disagrees with including projections on council tax levels and tax base, arguing that councils should be allowed to retain increases in council tax income achieved through tax base growth.
• Statutory Duties: The council agrees that the government should work to reduce unnecessary or disproportionate burden created by statutory duties, particularly in relation to SEND and home to school transport legislation.
• Adult Social Care: The council supports updating the Adult Social Care Relative Needs Formula but has concerns about the lack of detail on the Low-Income Adjustment.
• Children and Young People's Services: The council notes that the new formula appears to have a significant redistributive effect and seeks more openness from the Department for Education and MHCLG to understand the changes.
• Highways Maintenance: The council agrees that the highways maintenance RNF should be reflected in its own formula but notes that there is no higher weighting for heavy goods vehicles.
• Home-to-School Transport: The council supports the introduction of the new HTST RNF but requests that the cap of 20 miles be removed to ensure that the service costs for authorities containing more rural geographies are properly recognised.

The response also includes detailed responses to the 46 questions posed in the consultation, which are shown in Appendix A.

The government is expected to set out its response to this consultation and final policy positions in a Policy Statement in the Autumn.