Source · Select Committees · Public Accounts Committee
Recommendation 23
23
We have previously concluded that the implications of reductions in service spending for service users...
Conclusion
We have previously concluded that the implications of reductions in service spending for service users and taxpayers are unclear. We have made several recommendations that the Department should work to improve its information on and understanding of pressures on services.91 The funding formula currently in use, and which includes measures of service need, was decided on in 2012–13 and uses some data from the 2001 census. There has been substantial growth in retained business rates since the start of the business rates retention system in 2013–14, which would be redistributed in a business rates reset.92
Government Response
Not Addressed
HM Government
Not Addressed
7.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2022 7.2 The government agrees with the Committee’s recommendation. The department has an established policy to rationalise funding for local government so that local authorities can make decisions based on local priorities. There is, however, a balance to be struck between giving flexibility and ensuring that the money will be used as intended and effectively. There are instances where ringfencing or bid-based grants are required, for example when we need detailed data from local authorities. 7.3 There is work taking place in both local growth and local government funding spaces to tackle this issue. The department is considering options to simplify grants under section 31 of the Local Government Act 2003 that fall outside of the Local Government Finance Settlement. Additionally, the department is looking at options to streamline the funding process for grants, such as the Levelling Up Fund and the UK Shared Prosperity Fund. 7.4 From the perspective of local authorities, any measures to simplify the local government finance system will be closely linked to local growth ambition on wider funding simplification. Measures across both areas are complementary in reducing the administrative burdens and support the delivery of wider government levelling up ambitions. 7.5 The government’s approach will be to deliver a more transparent, simpler and accountable system, reducing the number of grants whilst also considering options to limit the creation of new grants. We will work closely with local authorities to consolidate in the most appropriate way.