New Financial Deal for Councils

12.00.00am BST (GMT +0100) Tue 9th Jul 2002

The government has launched a once-in-a generation review of the way government grants to local councils are allocated: the so-called Standard Assessment Formula.

There will be a consultation over the summer months on how the system should be reformed to get a better balance between the main elements: population; deprivation (which has in the past been used to penalise Richmond heavily); and salary costs in different parts of the country.

Vincent Cable said he "very much welcomed the review - something I have been calling for since I became an MP. The present system is hideously over complicated and very unfair. Residents find it very difficult to understand why they pay the council tax that they do. The government must come up with a formula which is much simpler and cleaner and recognises that even the better off boroughs like ours still have to provide basic services".