Source · Select Committees · Public Accounts Committee
Recommendation 25
25
We received written evidence from SOLACE, which told us that “one-year financial settlements, which are...
Conclusion
We received written evidence from SOLACE, which told us that “one-year financial settlements, which are delivered late in the budget planning cycle, presents risks and can result in very damaging cuts to services residents and businesses rely on.” Similarly, CIPFA argued that delayed or incomplete information from government adds to the complexity of financial planning and leads to increased financial instability and may result in service reduction. SIGOMA similarly emphasised that without certainty, councils “cannot plan a future service structure that fits within a known, sustainable funding envelope”.75 The provisional local government finance settlement for 2021–22 was published on 17 December 2020 and Manchester City Council stressed the need for earlier information next year, citing that not having certainty on funding for 2022–23 until December was going to be “incredibly difficult to manage”.76
Government Response
Acknowledged
HM Government
Acknowledged
7.1 The government agrees with the Committee’s recommendation. Target implementation date: End 2021 7.2 HM Treasury, MHCLG and other departments will continue to monitor the pressures that local authorities are facing as a result of the COVID-19 pandemic and recognise the importance of giving local authorities clarity on future resources to support effective financial planning. HM Treasury wrote to the Committee on 22 June 2021 on this topic. 7.3 The government intends to confirm the overall funding settlement for local government in 2022-23 at the 2021 Spending Review, and the department is hoping to give the sector as much early financial certainty as possible. The review will deliver on the government’s priorities, with further details to be set out in due course. 7.4 Following the 2021 Spending Review, MHCLG will provide further details of the proposed allocation of resources to each local authority through the provisional Local Government Finance Settlement (LGFS). The LGFS will be timed to ensure that all local authorities are able to confirm their budgets ahead of the start of the 2022-23 financial year.