§ The Minister for Local and Regional Government (Mr. Nick Raynsford)Together with representatives of local government and other Government Departments, the Office of the Deputy Prime Minister has reviewed the prospect for incorporating 2001 census data in the formula calculations used to distribute formula grant to local authorities. The Office of the Deputy Prime Minister has concluded that we should postpone the introduction of 2001 census data in the calculation of the local government finance settlement until the formula freeze is lifted, in 2006–07 at the earliest.
The 2001 White Paper "Strong Local Leadership—Quality Public Services", (CM5237), announced that the funding formula would be frozen for at least 2004–05 and 2005–06. Our aim is to provide local government with predictable and stable funding, so that they can plan their finances and their service provision from year to year.
It is clear that using 2001 census data to calculate the local government finance settlement will require formula changes, and will cause some large changes to the distribution of formula spending shares.
In deciding not to update the census data used in the funding formulae in 2005–06, we have balanced our aim of using the most up to date data to calculate local government grants against our commitment to the formula freeze and to stability and predictability in local government funding.
The Office of the Deputy Prime Minister will work with local government to produce options to include the 2001 census data in the funding formula once the present formula freeze is lifted.