Wide variations

The MPs said the current system was complex and often resulted in public bodies getting the wrong amount of money.
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“Start Quote

It is essential that this money is distributed fairly, consistently and transparently - but we found that this is not always the case”

End Quote Margaret Hodge Labour MP and PAC chair

One fifth of councils received either 10% too much or too little money, it found.

In the cases of schools, the committee found that funding per pupil was based on historical spending patterns rather than current need and this was leading to unacceptable discrepancies.

"It is essential that this money is distributed fairly, consistently and transparently - but we found that this is not always the case," Labour MP Margaret Hodge, who chairs the committee, said.

"It cannot be right that at a time of budget cuts that this results in Wokingham Council receiving double the funding it actually needs while many other local authorities, such as Dorset County Council, get much less than they require."

While, in some instances, the information used to calculate spending was based on independent, authoritative, published advice, the committee found that this was not the case in other areas.

Some departments were relying on Census data that was a decade out of date, it added, and an alternative source of information may be required should this year's Census be the last.

"All of the approaches to formula funding we considered are under review," Ms Hodge added. "This is the perfect opportunity to address the weaknesses this committee has identified."

On its website, the Department of Education said school allocations for 2011-12 were initially based on 2010-11 figures but from June these were revised to take into account up to date pupil numbers.

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