Source · Select Committees · Public Accounts Committee
Recommendation 25
25
We have previously recommended that reform of local government finance should take place in a...
Conclusion
We have previously recommended that reform of local government finance should take place in a measured fashion to ensure the new arrangements are fit for purpose and built to last. We recommended that a stable funding environment, ideally based on a multi-year settlement, is established as a bridging mechanism while more fundamental long-term reforms are designed.101 The latest spending review set out local government 91 Committee of Public Accounts, Financial sustainability of local authorities, Fiftieth Report of Session 2017–19, HC 970, 4 July 2018, conclusion/recommendation 4; Committee of Public Accounts, Local government spending, Seventy-Sixth Report of Session 2017–19, HC 1775, 6 February 2019, recommendations 1, 3, 4; Committee of Public Accounts, Local government governance and accountability, Ninety-Seventh Report of Session 2017–19, HC 2077, 15 May 2019, recommendation 1; Committee of Public Accounts, COVID-19: Local government finance, Fourth Report of Session 2021–22, HC 239, 4 June 2021, recommendation 5 92 C&AG’s Report, pages 16 and 33, Figures 7 and 17 93 C&AG’s Report, page 4 94 Qq 69, 74 95 Qq 69, 73–75 96 Department for Levelling Up, Housing and Communities, Provisional local government finance settlement: England 2022 to 2023, 16 December 2021 97 Qq 70–73 98 Qq 81–82 99 Qq 91, 95–96 100 Department of Health and Social Care, People at the heart of care: adult social care reform white paper, 1 December 2021. 101 Committee of Public Accounts, COVID-19: Local government finance, Fourth Report of Session 2021–22, HC 239, 4 June 2021, recommendation 6 Local Government Finance System: Overview and Challenges 19 funding for three years but was silent on the prospects for a multi-year settlement for local government.102 Government subsequently announced in December 2021 its intention for a single year settlement for 2022–2023. Rationalising funding arrangements
Government Response
Not Addressed
HM Government
Not Addressed
6.2 The government agrees with the Committee and recognises how important certainty is to local authorities. The department’s approach to supporting the sector ahead of any potential reform is set out in the Local Government Finance Settlement 2022-23, which was published on 7 February, and which passed the House on 9 February. This settlement provides the resources and stability councils need, following the impact of pandemic and to support the levelling up agenda. It makes available £54.1 billion in 2022-23 for local government in England, an increase of up to £3.7 billion on 2021-22, including funding for adult social care reform. This significant investment includes over £1 billion specifically for councils to meet social care pressures and a new one-off 2022-23 Services Grant worth £822 million, which will be un-ringfenced in recognition that local leaders know the priorities for their local communities best. 6.3 The government knows how important it is for local authorities to be able to plan for any potential reforms. That is why the government have committed to work closely with local partners and take stock of the challenges and opportunities they face, before consulting on any potential funding reform. 6.4 The department wrote to the Committee in April alongside this Treasury Minute setting out its plans to support the local government sector ahead of any potential longer-term reforms.