Source · Select Committees · Public Accounts Committee
Recommendation 5
5
We are concerned the Department is worryingly complacent in its view that the spending review...
Conclusion
We are concerned the Department is worryingly complacent in its view that the spending review will put local services on a sustainable footing. The spending review provided an extra £4.8 billion, £1.6 billion per year for the period 2022– 23 to 2024–25, along with assumed council tax rises (although lower rises than in recent years). These plus assumed growth in business rates will need to provide the “business as usual” funding for adult social care. The Department’s view is that this funding leaves the sector in a sustainable position, enabling local authorities to improve services and meet the rising demand and cost pressures they are facing. It is confident there will be no need to go back to the Treasury to ask for additional pots of short-term funding, as in previous years. Yet we remain sceptical when neither the Department nor the Treasury can explain how the adult and children’s social care pressures are built into the spending review settlement, council tax is rising by less than inflation this year and the pandemic means business rates growth is even more uncertain than usual. Recommendation: Alongside its Treasury Minute response to this report the Department should write with more detailed assurance on the expected impact of the spending review on services and, working with other government departments, set out its plans to keep this under review.
Government Response
Not Addressed
HM Government
Not Addressed
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department recognises the pressures on local services and the importance of a sustainable funding platform. To support services, the 2021 Spending Review settlement provides local authorities with an estimated average annual increase in Core Spending Power of 3% in real terms each year of the Spending Review period, including investment in Adult Social Care reform. By 2024-25 it is expected to rise to around £59 billion. Local government can also expect to receive additional income from 2024-25 from the Extended Producer Responsibility scheme, for managing packaging waste. This funding package ensures local services can respond effectively to rising demand and cost pressures, including adult social care reform. 5.3 The department continues to work closely with the local government sector and other government departments to ensure that councils have the resources to meet pressures and maintain current service levels. Alongside monitoring local authority finances, the department engages regularly with local authorities and other government departments to understand and assess policy outcomes. This includes working closely with the Department for Health and Social Care on plans to deliver a significant package of Adult Social Care reforms, as well as the Department for Education on the upcoming SEND Review and Independent Care Review. The department is working at pace to bring together the qualitative and quantitative information from this work to regularly assess any emerging pressures on the sector, particularly in the context of the war in Ukraine. 5.4 The department wrote to the Committee in April alongside this Treasury Minute with more detailed assurance of the impact of the Spending Review on services and its plans to work with other government departments to keep this under review.