We asked MHCLG how its reforms will help councils deal with the immense financial challenges they face. It told us it recognised the problems and, through funding reform, it was seeking to align the way funding is distributed much more closely with changes in demographics, levels of 69 Committee of Public Accounts, Support for children and young people with special educational needs, First Report of session 2024–25, HC 353, 15 January 2025 70 HM Treasury, Government Response to the Committee of Public Accounts on the First to the Fourth and the Sixth to the Ninth reports from Session 2024–25, April 2025 71 Q 14 72 Q 78 73 Q 78 74 Qq 78, 80 75 C&AG’s Report, para 3.41 76 C&AG’s Report, para 3.46 77 MHCLG, Local government reorganisation: letter to two-tier areas, 16 December 2024 19 deprivation, and the need for services.78 It recognised that the funding formulae had not been updated for many years and, as a result, was “out of kilter” with the actual needs of people.79 MHCLG acknowledged the risk highlighted by Professor Tony Travers that because reform has not been tackled for so long, it will lead to huge losses for some and massive gains for others across the local government system.80 A second consultation, likely in June, would set out more detail and give local authorities an indication of their future funding and the transitional arrangements.81