Recommendation 8

Central government has not given local authorities the clarity or support they need over longer-term funding. Central government promised that local authorities would have the resources they needed to respond to the COVID-19 crisis, but many local authorities are facing income shortfalls and increased demand and will not be able to fund crisis spending out of their current resources. At the time of our hearing, central government had provided local authorities with £3.2 billion in funding to respond to COVID-19 pressures across local services and recognises that it needs to provide further support. In addition, while the Ministry of Housing, Communities & Local Government (the Ministry) has set out the areas of local government funding that central government will refund, it has not been clear in all cases the exact spend that qualifies, for example on help for rough sleepers. The government is working on a comprehensive solution to provide more certainty to local government and it will look at long-term funding as part of the next Spending Review, but local authorities need clarity now so that they can plan and prioritise future spending. This is vital if we are to avoid the situation of local authorities getting into acute financial difficulties and having to issue section 114 notices imposing spending restrictions. The Ministry is monitoring monthly returns from councils to identify funding problems but has not yet published these. 8 Whole of Government Response to COVID-19 Recommendation: The Ministry needs to minimise the risk of local authorities running into severe financial difficulties by taking action to identify authorities at risk and working with the Treasury to determine a clear and timely financial settlement to support all local authorities through the next phase of the pandemic. Whole of Government Response to COVID-19 9 1 The government’s overall response