A new government formula to deliver grants to local councils has been criticised as "complex and confusing" by an all-party committee of MPs.

A report by the local government and regions select committee said that far from being clearer to the public, the new system will put people off local politics.

The government promised three years of thorough research to improve the way revenue funding is distributed to local councils Andrew Bennett MP

Andrew Bennett, the Labour chair of the committee, said: "If people could actually understand how their council was funded, they would more likely turn out to vote in local elections."

The committee's report said a government review, which began in 1998, that led to the new formula had wasted time in its early stages leading to "severe consequences to the overall quality" of its outcome.

Simpler and fairer

Only last month the government used the formula to distribute more than �50bn for council services across England.

How that vast pot of cash is shared out will decide, for example, how much each school gets or how much goes on social services for children and the elderly in every area.

When the Local Government Minister Nick Raynsford unveiled the formula he said it was simpler and fairer.

But the MPs do not agree - they say it is just as baffling as the old system and will do nothing to halt the low turn-out in local elections.

Lower grants

The report questions how factors like child poverty are measured and raises concerns about the reliability of the new census.

The survey has shown big population falls in areas like Manchester - and that results in lower grants.

The committee has urged councils to rely more on electoral rolls and their own surveys to verify population size.

And it criticises the government for using a new grant formula before homes are re-valued for council tax.

People's council tax bandings are still based on 1991 house prices and MPs say that the longer re-valuation is delayed the more dramatic the effects will be on the distribution of government grant.

Fundamental review

Mr Bennett said: "The government promised three years of thorough research to improve the way revenue funding is distributed to local councils.

"After four years they have presented a new system which is equally complex and confusing."

He welcomed a fundamental review of the balance of funding between central and local government, but added that he was concerned that there was no end date for the review.

The committee members also urged the government to announce its funding plans earlier in the year, to help councils with their planning.