Source · Select Committees · Public Accounts Committee
Recommendation 14
14
The Department’s Accounting Officer is responsible for the overall accountability system for local government, including...
Conclusion
The Department’s Accounting Officer is responsible for the overall accountability system for local government, including providing assurance that it is working effectively and understanding risk, both across the system and in relation to individual councils.54 The Department has improved aspects of its oversight of local government finance since 2010–11, for example by collecting information from a wider range of departments in preparation for spending reviews and creating analytical tools to inform its assessment of financial risk.55 The Department has been collecting information on the impact COVID-19 is having on local authority finances. However, it told us that it plans to cease this data collection at the end of 2021.56We previously reported on the quality of the Department’s engagement with local government during the pandemic, although the performance of 47 Committee of Public Accounts, Financial sustainability of local authorities, Fiftieth Report of Session 2017–19, HC 970, 4 July 2018, recommendation 6 48 Committee of Public Accounts, Local government governance and accountability, Ninety-Seventh Report of Session 2017–19, HC 2077, 15 May 2019, para 5 49 Committee of Public Accounts, Oral evidence: Local Government Governance and Accountability, HC 1738, Wednesday 27 March 2019, Q 27 50 Sir Tony Redmond, Independent review into the oversight of local audit and the transparency of local authority financial reporting, September 2020, para 9.6; Committee of Public Accounts, Financial sustainability of local authorities, Fiftieth Report of Session 2017–19, HC 970, 4 July 2018, recommendation 6; Committee of Public Accounts, Local government governance and accountability, Ninety-Seventh Report of Session 2017–19, HC 2077, 15 May 2019, recommendation 2 51 (LFS0001/ICAEW), paras 35 and 36 52 Qq 112–114 53 Ministry of Housing, Communities & Local Government, Local audit framework: technical consultation, 28 July 2021, paras 97–100 and questions 16, 17 54 Ministry
Government Response
Not Addressed
HM Government
Not Addressed
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 In addition to the approach outlined under recommendation one, the department is strengthening its data collections on local authority risk and reserves to improve its oversight of local government. 4.3 Further work is ongoing to improve data collection on risk. This brings together data with intelligence from ongoing engagement with the sector and other government departments to provide an overall understanding of the risks affecting the sector and individual authorities. This includes their financial viability, service delivery and performance, leadership or corporate governance and now includes capital risk. The department looks at risk levels to identify local authorities which may need support. This could then be addressed by sector led peer support from the Local Government Association (LGA) or in some circumstances through exceptional financial support. 4.4 The government recognises the value of information on local authority reserves. That’s why the department is collecting more detailed information from local authorities on the different types and purposes of earmarked reserves that they hold, as part of the Local Authority Revenue Expenditure and Financing collections from 2022-23 onwards. This data will improve the understanding of local authority reserves within government, facilitating evidence-informed decision-making, for instance on the right level of resources to be made available to local government. 4.5 The department wrote to the Committee in April alongside this Treasury Minute with more detail about its new data collections and how it plans to use these data.