Source · Select Committees · Public Accounts Committee
Recommendation 1
1
On the basis of a report by the Comptroller and Auditor General, we took evidence...
Conclusion
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Ministry of Housing, Communities & Local Government (the Department) and HM Treasury about local government finance in England during the COVID-19 pandemic.1 We also took evidence from the Society of County Treasurers, the Society of Local Authority Chief Executives and Senior Managers (SOLACE), the Chartered Institute of Public Finance and Accountancy (CIPFA) and Manchester City Council.
Government Response
Acknowledged
HM Government
Acknowledged
1.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2021 1.2 In the run-up to the COVID-19 pandemic, the Ministry for Housing, Communities and Local Government (MHCLG or the department) had participated in Operation Cygnus, the pandemic flu preparedness exercise, with engagement led by the Resilience and 13 Emergencies Division. The lessons informed the Pandemic Flu Readiness Board (PFRB) work programme as commissioned in February 2017. 1.3 Departmental contingency planning had also stress-tested local government’s responses to economic shock, and this planning informed the response to the pandemic; but the economic impact of the pandemic surpassed all expectations, and the department accepts that it had not modelled a crisis of this scale. 1.4 The department’s objective from the outset, and the policy levers available, were clear. The key objective, to protect public services, has remained throughout, while as the pandemic developed, the department has also acted to increase support to local authorities and strengthen engagement and monitoring. 1.5 The department therefore acted quickly to provide proactive funding of £3.2 billion and build a monitoring and engagement framework to ensure the department’s actions were evidence-led, responsive and timely, addressing the very serious risks to public services. In July 2020, the department then announced a comprehensive package of measures including further funding for expenditure costs and support for tax and sales fees losses. The new systems, including financial impact monitoring, which have been put in place will stand the government in good stead if they are needed again in future, as will the framework we have developed, which can support losses of income and increases in expenditure through Section 31 grants. The department will write to update the Committee by the end of 2021 to set out how it is improving its oversight of local government finance to prepare for future emergencies.