House of Commons · Written Ministerial Statement
Fair Funding Review 2.0 and Modernising and Improving the Administration of Council Tax
20 June 2025 · Ministry of Housing, Communities and Local Government
Proposed by Jim McMahon Lab Co-op Oldham West, Chadderton and Royton
Summarised by AI from the official record, so it can contain mistakes.
At a glance
Key points
- The government is launching a consultation to update the fair funding formulae for local government in England.
- Proposals include simplifying funding systems, consolidating grants, and resetting the business rates retention system.
- The consultation also aims to improve the administration of council tax by ending aggressive collection practices and spreading payments over 12 months.
Issue summary
The statement addresses the government's plan to reform local government funding and modernise the council tax system in England.
Action requested
The minister is launching a consultation on updating the fair funding formulae, simplifying funding systems, consolidating grants, and resetting the business rates retention system. Additionally, they are consulting on changes to the administration of council tax to make it more efficient and fair for taxpayers, including proposals to end aggressive collection practices and spread payments over 12 monthly instalments.
Key facts
- The government's plan aims to move £2 billion of funding to areas that need it most.
- A consultation on Fair Funding Review 2.0 is open until 15/08/2025; a separate consultation on council tax modernisation runs until 12/09/2025.
- The current funding formula has not been updated since 2013-14, leading to unequal outcomes for people and places.
- The government will consolidate grants into the Settlement, ending wasteful competitive bidding pots and restrictive reporting requirements.
- Proposals include a new default of 12 monthly instalments for council tax payments.