Source · Select Committees · Public Accounts Committee
Recommendation 19
19
The Department told us the spending review “gives local government, looking at the sectoral level,...
Conclusion
The Department told us the spending review “gives local government, looking at the sectoral level, the resources that it needs” to respond to rising demand and cost pressures, and “leaves the sector in a sustainable position.”73 The Department and the Treasury stressed the work carried out to underpin this conclusion. They told us they considered the impact of the pandemic on local authority income and estimated demand, demographics and unit costs for key public services, including the impact of COVID-19 on demand for children’s services.74 When we asked about continued upward pressure on council tax, the Department emphasised the additional grant funding and pointed out that the increase in council tax during this spending review will be lower than in recent years.75 The Treasury pointed out that the assumptions that council tax would rise by up to 3% was lower than inflation next year.76 The Department told us that it was also providing additional support to improve the quality of services, such as through funding for family help.77 Both the Department and the Treasury were confident that this time there would be no need to return to the Treasury for top-ups and short-term funding for local government during the spending review period.78 Yet the Department acknowledged that the local government sector is under pressure at the moment and it will continue to “monitor closely and engage carefully with the sector, particularly the councils that need it the most” during the spending review period.79
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.