Source · Select Committees · Public Accounts Committee
Recommendation 22
22
CIPFA and SOLACE called for a broader review of potential reform options rooted in a...
Conclusion
CIPFA and SOLACE called for a broader review of potential reform options rooted in a deeper understanding of the impact of the pandemic on council tax and business rates, encompassing the government’s promised reforms to adult social care funding, and potentially leading to more radical reforms than current proposals.58 However, Manchester City Council and the Society of County Treasurers were clear that these reforms should not be rushed. This was both to allow the effects of the pandemic on local government finance to settle down, and also to ensure that sufficient time was available to allow for 50 Qq 125, 132, 141 51 Q1, Q5 52 Qq 145, 159 53 Committee of Public Accounts, Local government spending, Seventy-sixth report of session 2017–2019, HC 1775, 6 February 2019, conclusions 3, 4 and 5 54 Q108; C&AG’s Report, paras 4.28–4.29 55 C&AG’s Report, para 1.6 56 Q43 57 Qq 15, 19, 39; C&AG’s Report, para 12 58 Qq 15, 17, 38 18 COVID-19: Local government finance the creation of substantive and workable reforms. SOLACE also called for stability in any interim period, ideally in the form of a multi-year settlement, while a new system is designed.59 The Department told us that it will set out its plans for taking reform forward before the end of this calendar year. However, it was clear that there was a “big suite of moving parts” involving other departments such as HM Treasury’s review of business rates, and the Department of Health and Social Care’s plans for social care. Nonetheless, the Department committed to reflecting on the messages from the sector “which is first, […] ‘Do not rush,’ and secondly, ‘Please make sure it is fit for purpose.’”60 Financial uncertainty for local authorities
Government Response
Acknowledged
HM Government
Acknowledged
6.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2021 6.2 The government will set out the future plan for local government funding at the 2021 Spending Review. The government has been clear that in determining a way forward, it will need to take stock of the impact the pandemic has had on both local authority resources and service pressures to determine the appropriateness of the previous proposals for local government finance reform. Equally, the government will want to ensure that local government is able to play a vital role in levelling up. 6.3 The timing of this exercise and our response to this recommendation is therefore subject to the conclusion of the upcoming 2021 Spending Review.