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Our response to the government's Fair Funding consultation

Cheshire East Council leaders and the chief executive have published the following open letter regarding the government's Fair Funding 2.0 consultation:

Delamere House
Delamere Street
Crewe
CW1 2JZ 

11 August 2025

Subject: Fair Funding 2.0 Consultation – A call to action

Dear partners and stakeholders,

We write to you jointly as the Leader, Deputy Leader, and Chief Executive of Cheshire East Council to draw your attention to the Government’s ongoing Fair Funding 2.0 Consultation, which proposes significant changes to the way local government is funded.

This consultation marks a pivotal moment for councils across the country, and for Cheshire East in particular. The proposals include:

  • A reset of business rates baselines;
  • A move towards council tax equalisation, redistributing funding based on local ability to raise resources;
  • Updates to needs-based funding formulas, which have not been revised since 2013;
  • Simplification of council tax administration, including a shift to payments in 12-month instalments.

While initial modelling suggests a modest increase in our assessed need (0.05 percent), driven by factors such as rurality and sparsity in Adults, Children’s, and school transport services, the broader implications for our financial sustainability and service delivery are profound.

We see potential for increased income through council tax growth over the proposed three-year settlement. However, our Medium Term Financial Strategy (MTFS) remains neutral on the outcome of the consultation, and we’ve made no assumptions—positive or negative—about the financial impact.

It’s important to highlight that current national proposals link funding to councils applying 5 per cent council tax increases each year. This limits local choice, and if the consultation doesn’t lead to changes, we may be penalised through council tax equalisation.

Council tax equalisation is a process where the government adjusts funding to reduce differences between councils, which could mean that councils choosing not to raise council tax by 5 per cent, may receive less support. Any extra income would only come from raising council tax, unless national decisions change.

We believe it is essential that the voices of Cheshire East’s communities and partners are heard. With responses that reflect common concerns, issues and opportunities from our town and parish councils, NHS partners, Police, Fire and Rescue, Business Improvement Districts, voluntary community sector organisations. These responses will strengthen our case for fair and equitable funding that reflects the unique challenges and opportunities in our borough.

We urge you to consider submitting a response to the consultation, using our own submission as a reference point. Your input will help ensure that the final funding framework recognises:

  • The steep divide between affluence and deprivation in Cheshire East;
  • The higher costs of service delivery in rural and dispersed communities;
  • The need for transitional protections to avoid cliff-edge funding reductions;
  • The importance of local flexibility and decision-making in financial planning.

The consultation closes on 11:59pm on 15 August 2025, and your engagement is vital. We have published our response in full and are making it available to you as a template to support your own submissions.

Together, we can advocate for a funding system that is fair, transparent, and responsive to the needs of our residents.

Yours sincerely,

Councillor Nick Mannion
Leader, Cheshire East Council

Councillor Michael Gorman
Deputy Leader, Cheshire East Council

Rob Polkinghorne
Chief Executive, Cheshire East Council

Links to UK Government’s Fair Funding Review 2.0 consultation

  1. GOV.UK consultation page
    This is the main government page detailing the consultation, its scope, documents, can be found at: The Fair Funding Review 2.0 – GOV.UK
  2. Citizen portal (MHCLG)
    This is where stakeholders can submit responses and access the consultation survey directly: Fair Funding Review 2.0 – Ministry of Housing, Communities and Local Government
  3. Cheshire East Council's: Submission to the consultation (PDF, 217KB)
  4. House of Commons library briefing
    A helpful summary and analysis of the consultation’s proposals and implications: Explaining the Fair Funding Review 2.0 – House of Commons Library

Access this page as a PDF open letter

Page last reviewed: 11 August 2025