Government issues guidance for Whitehall on applying Funding Simplification Doctrine to funding local authorities
The Department for Levelling Up, Housing and Communities (DLUHC) has issued guidance providing an overview of the 'Funding Simplification Doctrine' and how Whitehall departments should consider it.
The doctrine, which came into force on 1 January 2024, is intended to ensure that central government chooses the most suitable distribution methodology when designing new funding for local authorities.
It comes after the publication in July last year of the Government’s funding simplification plan, which arose out of the Levelling Up White Paper and sets out the Government’s ambition for “increasing the effectiveness and efficiency of the current funding system”.
By reducing administrative burdens, the plan will support local authorities to maximise their return on spending, generating the best outcomes for communities, DLUHC said.
The guidance, which is designed to enable government departments to effectively consider the doctrine as part of policy development, covers:
- Background
- Scope and eligibility
- What is the Funding Simplification Doctrine?
- How the Doctrine will work in practice
- Principle 1: Building from existing programmes
- Principle 2: Selecting a distribution methodology that best achieves funding objectives
- Principle 3: Testing
- Principle 4: Data
- Who can I contact for further advice?
The doctrine covers all new funds that are made available exclusively to local authorities by central government, but explicitly excludes funding within the Local Government Finance Settlement and services mandated by statute such as:
- funding for schools
- children’s and adult social care
- the police
- fire and rescue authorities (including those that are part of a county council or unitary authority)
- public health
The guidance can be read here.
Where arm’s length bodies (ALBs) linked to government departments provide funding to local authorities, those departments will be expected to work with the ALBs to ensure that they also operate consistently with the doctrine.
