Select committee: Housing, Communities and Local Government Committee
Conclusion 18
Third Report - Financial distress in local authorities
Published 1 Feb 2024
Paragraph 118
Addressed to Ministry of Housing, Communities and Local Government
Housing, Communities and Local Government Committee Financial distress in local authorities All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The Government’s use of the statutory override and one-off ‘safety valve’ funding are temporary measures and do not address the underlying mismatch between demand, costs, and annual Dedicated Schools Grant funding. They will not prevent local authorities from accumulating further deficits until the underlying mismatch is resolved, and we do not believe it is realistic to expect local authorities to manage down deficits of the scale of many billions of pounds in total over a period of two or three years. Without significant additional funding via the DSG to match service demand and costs, or a further extension to the statutory override - which would, at most, offer a further period of temporary respite - the sector faces a cliff-edge of section 114 notices.
From: Housing, Communities and Local Government Committee, Third Report - Financial distress in local authorities (HC 56), paragraph 118, 1 February 2024
Government response
The government responded to the whole report on 26 March 2024 (deadline 1 April 2024).