The most important principle in the distribution of funds to local government is horizontal fiscal equalisation (HFE). This means that the Commission must ensure that the recommended distribution is sufficient to allow a council to function, by reasonable effort, at a standard not lower than the average standard of all councils within the State.

The Commission also operate a triennial review whereby major method changes are incorporated into its assessments only every three years, with data updates and minor methodological revisions incorporated each year.

The 2011-12 distribution is the second year of a Triennial Review, which means that only data updates were allowed in the calculations. The next year when major changes can be introduced into the calculations will be for the 2012-13 distribution.

Full details of the Commission’s current methodology can be found in the most recent Annual Report on the Publications page.