Source · Select Committees · Public Accounts Committee
Recommendation 26
26
A Local Government Association review found 448 individual grants to local authorities between 2015–16 and...
Conclusion
A Local Government Association review found 448 individual grants to local authorities between 2015–16 and 2018–19, and in any one of those years local authorities received around 250 grants.103 Twenty-two grant funds were available for net zero work alone in 2020–21, many of which were competitive funds with limited delivery timescales.104 A recent Chartered Institute of Public Finance and Accountancy paper on grant funding observed that local government receives a larger number of smaller grants than previously and concluded “Smaller, shorter-duration and less flexible grants challenge the limited resources of many councils, particularly when they are competed.”105 The National Infrastructure Commission has criticised the way infrastructure and regeneration grants are allocated through multiple decision-making processes, and the fact that much capital funding for transport projects is dependent on competitive bidding, as both create uncertainty.106
Government Response
Not Addressed
HM Government
Not Addressed
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.