Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Accepted
Lack of joined-up working results in competing funding demands for local authorities.
Conclusion
Many departments rely on local authorities to deliver policy initiatives, although lack of joined-up working has resulted in competing funding demands. Our predecessors warned that competition between the Home Office and local authorities for local accommodation was “driving up prices and exacerbating the homelessness challenges that local authorities already face”.31 HM Treasury told us that it was using the spending review to encourage join-up across different parts of the system to help deliver government missions.32 MHCLG said it wanted to implement more integrated budget models between local government and other parts of government to facilitate joint-planning.33 Investing in prevention
Government Response Summary
The government agrees to improve joined-up working by the end of 2025, explaining how the Fair Funding Review 2.0 consultation and the Local Government Outcomes Framework (active from April 2026) will facilitate better cross-government collaboration and local delivery, alongside continued grant consolidation efforts.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Target implementation date: by the end of 2025, as part of the upcoming multi-year Local Government Finance Settlement. 2.2 On 20 June 2025, the government published the Fair Funding Review 2.0 consultation which set out the approach to radically simplify local authority funding, to provide local authorities with more flexibility and certainty over a greater proportion of funding. This will be supported by the Local Government Outcomes Framework, which, as set out above, establishes 15 national outcomes that central government wants to work with local authorities to deliver with their more flexible funding. From April 2026, the Framework will be used to help facilitate better join-up across central government to support local delivery, based around a set of collective priorities for local government. To simplify local authority funding that is currently distributed outside of the Local Government Finance Settlement, the government intends to bring together grants from across departments into large ringfenced consolidated grants, delivered as part of the upcoming multi-year Settlement. At least four large, consolidated grants will bring together funding streams across government for Public Health; Children, Families and Youth; Crisis and Resilience; and Homelessness and Rough Sleeping. The government also intends to roll suitable grants into the Revenue Support Grant where appropriate. 2.3 The government also proposes to simplify existing Settlement grant funding, including for adult social care. The government is proposing to consolidate the Market Sustainability and Improvement Fund and Social Care Grant into the updated Settlement Funding Assessment next year. The LA Better Care Grant will remain a grant, to ensure continued joint working between health and social care. MHCLG and DHSC continue to work closely on funding arrangements and assurance for adult social care. 2.4 The upcoming multi-year Settlement will pave the way for further consolidation in future years. Cross-government work will continue to explore which grants can be consolidated into the Settlement, aiming to avoid the use of micro-grants and future proliferation of grants to local authorities.