Recommendation 7

It is unacceptable that local authorities continue to face uncertainty about the level of financial support they can expect from government on top of the other pressures and uncertainty with which they are currently required to cope. The pandemic has created financial uncertainty for local authorities about their future commercial and other income, service needs, ability to make savings, and ability to collect local taxes. Additional uncertainty and late information about government funding on top of this could risk cuts to the services residents and businesses rely on. The Department and HM Treasury recognise the importance of funding certainty and early information to good financial management. Yet neither have committed to improving their current approach in light of recent experience. Local authority public health grant allocations were published by the Department for Health & Social Care in mid-March 2020, after local authorities had set their budgets for 2021–22, and only 15 days before the end of the financial year. We welcome the announcement that the government will take steps to rule out business rates appeals related to changes in circumstances due to the pandemic, removing a source of uncertainty for local authority finances. However, this decision came less than a week before the end of the financial year. Recommendation: HM Treasury, working with the Department and other departments as necessary, should explore ways that the government can give local authorities more financial certainty as they develop their 2022–23 spending plans and write to us with conclusions by June 2021. COVID-19: Local government finance 9 1 Supporting local authority financial sustainability in the first year of the pandemic