7
Conclusion
Second Report - Local authority financi…
Acknowledged
The funding base of local government in England is very narrow. As the pandemic has highlighted, revenue derived from council tax and business rates is also insecure. As concluded by our predecessor Committee, greater fiscal autonomy could contribute to local government financial resilience.
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The funding base of local government in England is very narrow. As the pandemic has highlighted, revenue derived from council tax and business rates is also insecure. As concluded by our predecessor Committee, greater fiscal autonomy could contribute to local government financial resilience.
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Government response AI summary
The government defends the current charging regime and highlights existing local flexibilities for council tax. It states that the Chancellor’s Fundamental Review of Business Rates is considering reform options, including greater local flexibility, and will conclude in Autumn.
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Ministry of Housing, Communities and Local Government
10
Conclusion
Second Report - Local authority financi…
Acknowledged
The proliferation in recent years of small, often one-off and ring-fenced grants, sometimes involving a competitive bidding process, and the uncertainty around such funding, can hinder robust financial planning and management by local authorities, as has been acknowledged by the Public Accounts Committee. Ring- fenced grants also limit councils’ flexibility …
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The proliferation in recent years of small, often one-off and ring-fenced grants, sometimes involving a competitive bidding process, and the uncertainty around such funding, can hinder robust financial planning and management by local authorities, as has been acknowledged by the Public Accounts Committee. Ring- fenced grants also limit councils’ flexibility to match spending to need. Reducing their number would give councils greater control over spending and would be consistent with our previous recommendation that councils be given great revenue- raising powers. (Paragraph 43) Local authority financial sustainability and the section 114 regime 41
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Government response AI summary
The government agrees that a stable funding environment is important and recognizes the challenges of multiple competitive funds. It states it is exploring opportunities to simplify the system, while also noting that ringfences and competitions can be helpful.
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Ministry of Housing, Communities and Local Government
13
Recommendation
Second Report - Local authority financi…
Acknowledged
We urge the Government to consider ways of mitigating the uneven financial support across local authorities and provide greater certainty to councils over what future costs incurred as a result of the pandemic it intends to cover. (Paragraph 55) Local authority commercial investment
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We urge the Government to consider ways of mitigating the uneven financial support across local authorities and provide greater certainty to councils over what future costs incurred as a result of the pandemic it intends to cover. (Paragraph 55) Local authority commercial investment
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Government response AI summary
The government states it has committed over £12 billion in funding and distributed it based on need. It is using monitoring and engagement to inform the ongoing Spending Review and will continue to work with individual authorities and keep the situation under review, without committing …
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Ministry of Housing, Communities and Local Government