Recommendations & Conclusions
4 items
4
Recommendation
Fourth Report - COVID-19: Local governm…
Acknowledged
The Department has not fulfilled previous assurances that it will be transparent about financial risk in the sector by sharing information with the National Audit Office. The Department previously told us that it would ensure the National Audit Office can see any information that it needs to about local authority …
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The Department has not fulfilled previous assurances that it will be transparent about financial risk in the sector by sharing information with the National Audit Office. The Department previously told us that it would ensure the National Audit Office can see any information that it needs to about local authority financial risk in order to support proper scrutiny by this Committee on behalf of Parliament. COVID-19: Local government finance 7 However, the Department has not provided all the information the National Audit Office has requested. Without this information, it is not possible for the National Audit Office or Parliament to get a full picture of the financial stress in the sector or evaluate how effectively the Department has addressed any issues. The Department has not yet found a satisfactory way of being transparent about the level of financial stress within the sector while maintaining appropriate levels of confidentiality in respect of information provided by local authorities. In the absence of other oversight mechanisms, Parliamentary scrutiny of the Department’s handling of financial risk in the sector is essential. Recommendation: In discussion with the National Audit Office, within three months the Department should find a way to share information relevant to financial risk in the sector, including about individual local authorities, while indicating on what basis it can or cannot be shared further.
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Government response AI summary
The government agrees with the recommendation and states it is mindful of the NAO's need for information while maintaining confidentiality with local authorities. It commits to continuing engagement with the NAO to meet their needs but does not outline specific new mechanisms for sharing information …
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HM Treasury
15
Recommendation
Fourth Report - COVID-19: Local governm…
Acknowledged
The Department told us that during the early months of the pandemic it developed greater structure and a stronger framework around exceptional financial support for individual authorities. Exceptional financial support is used where the Department accepts authorities face unmanageable financial pressures despite other government support measures.36 The Department asserted that …
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The Department told us that during the early months of the pandemic it developed greater structure and a stronger framework around exceptional financial support for individual authorities. Exceptional financial support is used where the Department accepts authorities face unmanageable financial pressures despite other government support measures.36 The Department asserted that it had been transparent in relation to cases where Ministers had agreed to provide exceptional financial support.37 However, the Department did not and does not share information on the total number of authorities that have approached it in relation to financial pressures, or the number of authorities where the Department has identified financial concerns itself. Similarly, while the NAO calculated the number of authorities at different levels of risk of financial failure using Departmental thresholds for comparing COVID-19 related funding gaps to reserves for individual authorities, the Department did not share with us or the NAO its own assessment of authorities at risk or how this had changed over time.38
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Government response AI summary
The government agrees with the recommendation but describes its existing monitoring and response to exceptional financial support requests, noting that all capitalisation directions are published. It states it has considered its engagement with at-risk authorities and will write to the Committee in October 2021 with …
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HM Treasury
16
Recommendation
Fourth Report - COVID-19: Local governm…
Acknowledged
The Department told the NAO that sharing information on the number of authorities interested in exceptional financial support or at risk more generally would invite public speculation on the identity of the authorities affected. However, the information the Department does not share is valuable for assessing the level of financial …
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The Department told the NAO that sharing information on the number of authorities interested in exceptional financial support or at risk more generally would invite public speculation on the identity of the authorities affected. However, the information the Department does not share is valuable for assessing the level of financial stress in the sector and therefore how well the Department’s other measures have served to deal with the burdens the pandemic has placed on local authorities. This information is needed to support Parliamentary scrutiny: the NAO told us it was not possible for it to get a full picture of the financial stress in the sector or evaluate how effectively the Department had addressed any issues without knowing the level of demand for exceptional support or the Department’s view on financial risk more generally.39
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Government response AI summary
The government agrees with the recommendation to share information with the NAO, acknowledging its statutory interest, but also stresses the need for confidentiality in discussions with local authorities and commits only to continued engagement with the NAO on how to meet its needs.
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HM Treasury
17
Recommendation
Fourth Report - COVID-19: Local governm…
Acknowledged
We previously discussed the provision of this type of information with the Department as part of our examination of the Department’s Starter Home programme. We recognised that sensitive information should not necessarily be made public, but we asked the Department to commit to ensuring “the National Audit Office can see …
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We previously discussed the provision of this type of information with the Department as part of our examination of the Department’s Starter Home programme. We recognised that sensitive information should not necessarily be made public, but we asked the Department to commit to ensuring “the National Audit Office can see anything it needs 32 Qq 12 and 30, LGF0011 submission from SOLACE page 2 33 LGF0003 submission from DCN paragraph 17 34 LGF0007 submission from SIGOMA paragraph 2.16 35 LCCI comment on coronavirus grant roll-out by councils (londonchamber.co.uk) 36 Qq 82, 85; C&AG’s Report, paras 19 and 2.5 37 Q 56; letter from Jeremy Pocklington CB, Permanent Secretary Ministry of Housing, Communities & Local Government to the Committee of Public Accounts regarding exceptional financial support, dated 17 March 2021. 38 Qq 109–115; C&AG’s Report paras 2.45–2.46 and 3.22–3.23. 39 Q110; C&AG’s Report, paras 2.45–2.46 COVID-19: Local government finance 15 to” in relation to financial pressure on individual authorities. The Department agreed at the time.40 We therefore asked the Department why, given this commitment, the NAO had struggled to access this information. The Department told us that its position was that information relating to individual councils and its analysis of their financial position should remain private and confidential. It asserted that it was important that it had “a private space where we can have confidential discussions with local authorities”. The NAO explained that it understood the need for this safe space but would have liked to have had more information shared with it. The NAO regularly receives confidential and highly sensitive information, in order to support Parliamentary scrutiny, and has demonstrated it can reach sensible judgements about what is put into the public domain. We therefore asked the Department what steps it thought it could take to ensure that the NAO and Parliament were aware of the scale of risk in the sector in future.
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Government response AI summary
The government agrees with the recommendation for the NAO and Parliament to be aware of sector risk, but emphasizes the need for confidential engagement with local authorities and commits only to continued engagement with the NAO to address its needs.
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HM Treasury