Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 15
15
Deferred
End ringfencing and standard spending requirements on all local authority funding.
Conclusion
The Ministry must end ringfencing by removing the standard spending requirements that are placed on the funding available to local authorities, whether the funding was provided by Government or collected locally. Spending requirements, such as ringfencing, should only be used in response to financial mismanagement. (Recommendation, Paragraph 64)
Government response summary AI-generated
The government's response focused on funding for Special Educational Needs and Disabilities (SEND) reform and managing associated deficits, rather than addressing the broader recommendation to end ringfencing of local authority funding.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Deferred
HM Government · verbatim extract
Deferred
31. We know that previous governments increasingly relied on ringfenced micro-grants to deliver departmental priorities. This Government recognises that this fragmented, restrictive funding system is not sustainable. In 2025–26 we consolidated almost £700m into the LGFS. We are going further and faster for 2026–27 and will deliver the biggest programme of funding simplification to date. 32. As laid out in the FFR 2.0 consultation, the Government intends to bring together grants from across government into large ringfenced consolidated grants, delivered as part of the Settlement. This will provide multi- year certainty over as much funding as possible, and reduce the late announcement of funding throughout the financial year. Many of these large grants will be structured to support prevention and service reform, as well as encouraging closer working across departments. Wherever possible, we will also roll suitable grants into the Revenue Support Grant, reducing the complexity of the funding landscape and number of micro grants local authorities currently have to manage. 33. The scale of change we are looking to deliver will take time and requires a cultural shift across government. Therefore, our work will continue beyond the upcoming LGFS to work across government to move away from using ringfences and other reporting requirements.
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