Government Launches Fair Funding and Council Tax Reform Plans

The Government has published a major Written Ministerial Statement setting out the next stage of its plans to reform how local government in England is funded — and how council tax is administered.

In the statement, Jim McMahon MP, Minister of State for Local Government and English Devolution, outlines an ambitious new direction for local government finance that seeks to reverse more than a decade of systemic underfunding, address high-need areas more fairly, and simplify the financial landscape for councils and communities alike. The announcement comes alongside two open consultations on:

• Fair Funding Review 2.0, aiming to update decade-old funding formulae, consolidate grants, reduce competitive bidding, and shift around £2 billion to places with the greatest need — including rural and disadvantaged communities.
• Council Tax Modernisation, focused on making the system fairer and more user-friendly, curbing aggressive collection practices, and spreading payments more evenly for households.

Both consultations are wide-ranging, touching on everything from multi-year settlements and rural cost pressures to the future of the New Homes Bonus and how mental health-related discounts are defined and delivered.

Read the full Ministerial Statement HERE

The Rural Services Network will be submitting formal responses to both consultations to ensure the voices of rural communities are heard.

The Fair Funding Review 2.0 consultation closes on 15 August 2025, details can be found HERE.

The Council Tax Modernisation consultation closes on 12 September 2025, details can be found HERE.