8
Conclusion
Fourth Report - COVID-19: Local governm…
Not Addressed
In addition to the March and April unringfenced funding, the Department provided two further tranches of unringfenced funding in 2020–21, bringing the total value of these grants to £4.55 billion. The Department took us through the ways in which its approach to allocating unringfenced funding changed. It used three different …
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In addition to the March and April unringfenced funding, the Department provided two further tranches of unringfenced funding in 2020–21, bringing the total value of these grants to £4.55 billion. The Department took us through the ways in which its approach to allocating unringfenced funding changed. It used three different approaches (existing funding formulas, population, and a new formula drawing on pandemic data returns) to allocate funding of £3.7 billion between March and July 2020. Since July 2020 the approach to funding allocation has been stable, although when asked if the current formula needed further revision the Department did not commit itself either way.16 By early December 2020 estimated financial support for the sector from the Department in unringfenced grants and support for sales, fees and charges income losses, funding from other government departments, and support from clinical commissioning groups stood at £9.1 billion. In December 2020 authorities estimated their full COVID-19 costs pressures and income losses for 2020–21 at £9.7 billion.17 Departmental data on local authority financial resilience during the pandemic
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Government response AI summary
The government response reiterates the figures from the Committee's conclusion, stating that £4.55 billion in un-ringfenced grants were provided by early December 2020, as part of £9.1 billion in total COVID-19 funding for local authorities.
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HM Treasury
14
Recommendation
Fourth Report - COVID-19: Local governm…
Not Addressed
We received written evidence from representative of the local government sector criticising a range of support schemes that were introduced during the pandemic, particularly business grants, as being complex or challenging to administer.30 Pandemic business rates relief started in March 2020 and the first business support grants distributed through local …
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We received written evidence from representative of the local government sector criticising a range of support schemes that were introduced during the pandemic, particularly business grants, as being complex or challenging to administer.30 Pandemic business rates relief started in March 2020 and the first business support grants distributed through local authorities started in April 2020.31 In relation to business grants, SOLACE told us that “the centrally set rules have been counterproductive” and on occasion had led to some councils “rapidly trying to ‘chuck the money out of the door’”, risking the effectiveness of spending and some assurance against fraud. SOLACE also told us “we made it clear to the Government early on with our business community that [the 26 Q32; LGF0007 submission from SIGOMA paras 2.18, 3.1; C&AG’s report, para 2.15–2.16. 27 Qq 34, 47 28 Q89 29 Department of Health & Social Care, Social Care Sector: Covid-19 Support Taskforce Final Report, September 2020, particularly recommendation 34 30 Qq 10, 12, 30, 33; LGF0011 submission from SOLACE pages 2 and 3, LGF0003 submission from DCN paragraphs 13 and 17, LGF0007 submission from SIGOMA paragraphs 2.15 and 2.16, LGF0010 submission from CIPFA paragraphs 3.5–3.6; C&AG’s Report, para 2.17 31 Financial support for businesses during coronavirus (COVID-19); Coronavirus grant funding: local authority payments to small and medium businesses 14 COVID-19: Local government finance proliferation of business grants] just needed to be rationalised.”32 However, the District Council Network (DCN) observed that it was not until March 2021 that BEIS responded to calls to simplify the schemes.33 SIGOMA pointed out in relation to a wide range of grants that “there seems to be a lack of appreciation in government” that the nature and timing of the government’s own scheme rules would have an impact on the speed with which authorities would start to make payments under the schemes.34 In April 2020, the London Chamber of
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Government response AI summary
The government's response, while stating agreement, does not directly address the recommendation to simplify complex support schemes but instead focuses on improving inter-departmental understanding of local government finance, committing to a written update on this.
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HM Treasury