The amount of money each of the 22 local authorities/councils in Wales receives each year (revenue support grant) is partially decided using a funding formula.

To work out the figure, the funding formula (called a standard spending assessment) uses information for each county including¹:

• The age make-up/age range of the population.
• The number of school children (and type of schools they attend).
• School pupils receiving free school meals.
• Types of housing residents live in.
• Welfare statistics (including the number of state pensioners) and levels of deprivation.
• The length of the road network (and the types of road).
• Specific capital works such as flood prevention.
• How the council finances debt.

There have been long-standing calls for this funding formula to be reviewed and, if necessary, reformed.

The argument has been put forward that the formula doesn’t properly take into account the budget pressures councils are under to provide services (to the same level) across sparsely populated rural areas.

Similarly, there are budget pressures facing councils that have above-average numbers of older residents (such as along the north Wales coast), or disabled residents.

Opponents to reform argue that any changes – without an overall increase in spending on local government – could lead to funding being redirected from more urban local authorities (mainly in the south) with larger populations and higher levels of poverty.

Technically, it affects everyone living in Wales.