Select committee: Housing, Communities and Local Government Committee
Conclusion 12
Second Report - Local authority financial sustainability and the section 114 regime
Published 19 Jul 2021
Paragraph 54
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 ↗
Conclusion (the committee's words)
The Government deserves credit for having responded to an unprecedented crisis with significant emergency funding that, from a national perspective, broadly covers all the additional financial pressures consequent on the pandemic and lockdowns in 2021–22. The effects of the pandemic will be felt for many years, however, and we are concerned that the Government has not committed to covering costs arising in future years, including from lost council tax and business rates. We are concerned, too, that some local authorities have been worse hit than others, particularly shire districts, and that some of these councils, even with the additional government funding, will still be left out of pocket. The disproportionate impact on local authorities will not assist the Government’s levelling up agenda.
From: Housing, Communities and Local Government Committee, Second Report - Local authority financial sustainability and the section 114 regime (HC 33), paragraph 54, 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.