A House of Commons select committee has attacked the government's proposals for reforming local government finance as "confusing".

The report into the Office of the Deputy Prime Minister's handling of the reform programme found many of the new formulae used to calculate local authority grants "do not appear to be evidence-based", are "insufficiently robust" and are "more open to judgement than previously".

Dramatic shifts in grants, based on population figures gathered in the 2001 census, brought the statistics into "contention" the committee said. It also found different poverty indicators were used to calculate children's social services and education needs "seemingly at whim".

It backed concerns raised by the Local Government Association that the government had tried to meet its promise to reduce the amount of ring-fenced grants by simply "reclassifying" some ring-fenced grants as specific formula grants.

As a result of the changes, a number of councils will receive a smaller share of government funds. For example, Westminster Council in London faces a shortfall of £42m. 

- Local Government Finance: Formula grant distribution from www.publications.parliament.uk/pa