Select committee: Housing, Communities and Local Government Committee
Recommendation 1
Second Report - Local authority financial sustainability and the section 114 regime
Published 19 Jul 2021
Paragraph 13
Addressed to Ministry of Housing, Communities and Local Government
Housing, Communities and Local Government Committee Local Authority Financial Sustainability and the Section 114 Regime All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
The failure to properly fund children’s and adult social care, especially adult social care, is the single biggest threat facing local government financial resilience. Given that the cost of providing social care consumes between 60% and 70% of the budgets of top-tier councils, a solution to this funding crisis alone could largely restore local government finances. The Government’s current policy of effectively forcing local councils to impose successive above-inflation council tax rises is imposing additional burdens on council tax payers. It is disappointing that the recent Queen’s Speech made so little mention of plans to reform social care funding. We are also concerned about the cuts to more discretionary services arising from councils’ need to prioritise social care provision. We recommend that the Government urgently reform the funding of social care in England.
From: Housing, Communities and Local Government Committee, Second Report - Local authority financial sustainability and the section 114 regime (HC 33), paragraph 13, 19 July 2021
Government response
The government responded to the whole report on 21 October 2021 (deadline 19 September 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government welcomes the Committee's report and responds recommendation by recommendation, agreeing on some audit and funding-stability points while setting out its existing approach on council tax, business rates and the section 114 regime.
- On social care, it points to its 7 September 2021 announcement of an additional £5.4 billion over 3 years and says it will publish further detail in a White Paper "later this year".
- On council tax, it states it "has no plans to replace or fundamentally reform council tax", saying a revaluation "would be expensive to undertake" and could raise bills for many households.
- On multi-year settlements, it "agrees that a stable funding environment ensures local authorities can plan effectively"; the approach to the next settlement "will be informed by the ongoing Spending Review".
- On local audit, it considers PSAA "best placed" as appointing body and will keep arrangements "under review". It agrees the new system leader should be able to join up auditor findings.