Recommendation 18

The Treasury confirmed to us that it ultimately bears the financial risk for local authorities. We expressed concerns about the level of oversight and control that the Treasury is exercising and whether it has a sufficient handle on this issue. The Treasury responded that it is working very closely with MHCLG to collect real-time data, but these regular data collection exercises have been limited to special-ringfenced funding allocations for COVID-19.37 The Treasury also stated that MHCLG has shared its assessment of the number of councils that are in significant financial difficulty and that its spending teams work closely with MHCLG.38 34 Redmond review, pp 72–74 35 Ministry of Housing, Communities and Local Government, Local authority financial reporting and external audit: government response to the independent review, December 2020 36 Q 103 37 Q 109 38 Q 111 Whole of Government Accounts 2018–19 13 2 Usefulness and Quality of the WGA Standardising financial reporting