Recommendation 22

Local authorities’ budgets are under more pressure than ever as a result of COVID-19, and many local authorities are concerned that they are not getting the financial support that they need from central government.55 The Local Government Association told us that without certainty of further funding and flexibility around their budget setting, many councils will have to take measures in anticipation of future funding shortfalls.56 This could mean in-year cuts to vital local services that are supporting communities through the crisis.57 The Ministry acknowledged that the need to provide more support for local government is well understood.58 The Ministry told us that it was taking action in three ways: analysing monthly monitoring returns from local authorities; providing further funding to local authorities, including £300 million for the Test and Trace programme; and work on a “fuller, more comprehensive solution” on local authority finance, to ensure that councils are put on a more sustainable footing this financial year.” It intends to publish the monthly monitoring return details “very soon”.59 It said that the most recent return shows that local authorities estimated expenditure pressures of £795 million from March to the end of May against the government’s COVID-19 priorities. The Ministry said it is reassured that it has provided sufficient funding to date and also that its policies and support for the sector can be informed by comprehensive returns.60 The Ministry told us that it was not aware of any local authorities that are imminently planning to issue a section 114 notice.61