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Fair Funding Review 2.0 and Modernising and Improving the Administration of Council Tax
20 June 2025
Type
Written Ministerial Statement
Department
Ministry of Housing, Communities and Local Government
At a Glance
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.
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