MPs attack system for allocating money to public bodies

by Mr007 Wed Nov 16, 2011 2:13 am

Primary school Pupils get funding through the Dedicated Schools Grant
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The way in which central government distributes money to hospitals, schools and councils is often unfair, unclear and inconsistent, MPs have claimed.

Under the system of formula-based grants, funding given to schools with similar needs could vary by up to 40%, the Public Accounts Committee said.

The data used to calculate awards was often out of date, its report found.

Ministers are reviewing the grants, with a new system for councils designed to give them more financial autonomy.

The grant system is being used to allocate more than £150bn, 20% of the government's entire spending, to public organisations this year.

But the cross-party Public Accounts Committee, which scrutinises government spending, said the three principal mechanisms for doing so - Primary Care Trust Allocations, Dedicated Schools Grant and Local Government Formula Grant - had serious weaknesses.

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