Source · Select Committees · Public Accounts Committee
Recommendation 9
9
The success of these larger samples relies on the capacity and cooperation of local authorities...
Conclusion
The success of these larger samples relies on the capacity and cooperation of local authorities to respond to the Department’s requests for information.34 The Department considers that it has not yet given local authorities the opportunity to do the necessary reconciliations, as it has been asking so much of them to deliver grant schemes.35 However, the ICAEW also noted that when government places additional responsibilities on local government, it is vital that it provides sufficient additional resources to enable it to administer these additional responsibilities. It indicated that the Department did not appear to have provided additional resource to enable local authorities to do so and it was therefore not surprising that some have struggled to meet the reporting and assurance requirements. It highlighted that the business support grants represented significant additional activity for some smaller local authorities, such as East Lindsey District Council, which distributed £46.5 million of payments under these schemes compared to total expenditure of £99.6 million reported in its 2020–21 accounts.36 A local authority is also responsible for any recovery actions where it has made ineligible payments.37 Local authorities would appear to have limited incentives to do so given they must cover the costs of debt recovery and prosecutions, and any recovered funds return to the Department.38 The limitations to the estimates of fraud and error also make it challenging for the Department and local authorities to assess the time and resources required to recover these funds.39
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2022 2.2 The general principle applies that local authorities are responsible and accountable for the lawful use of funds under Section 151 of the Local Government Act 1972. 2.3 Section 151 Officers within the local authorities are required to exercise their duties in line with the Chartered Institute of Public Finance and Accountability (CIPFA) guidance, 26 ensuring their oversight of the proper administration of financial affairs within the local authority including these grants. 2.4. It is a condition of BEIS grants to local authorities that they must take all reasonable and practicable steps to recover any payment made in fraud or error before BEIS becomes liable. BEIS will pursue collection of all outstanding debt unless there is a value for money (VFM) case for not doing so. Decisions will be made on a case-by-case basis. A dedicated debt recovery policy has been developed with Cabinet Office and Treasury (HMT). The debt recovery policy guidance has been published on GOV.UK. 2.5 Further details to be provided in due course. The department will write to the Committee detailing how full cooperation from local authorities will enable robust fraud and error estimates which will lead to better recovery outcomes.