Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Accepted
MHCLG allocates significant grants to enhance children's social care and homelessness prevention.
Conclusion
MHCLG said it had already begun to focus funding on prevention in a number of ways, including the introduction of a new £270 million grant for children’s social care prevention. It had also increased the overall homelessness prevention grant for 2025–26 and specified that 49% must be spent on prevention, relief and staffing activity rather than on providing temporary accommodation.42 MHCLG told us that there was compelling evidence that shifting to prevention, particularly for children’s social care, homelessness and temporary accommodation, results in improved outcomes for people along with quick payback periods. MHCLG did recognise the challenge for local authorities of ringfencing funding and said that, although it avoided this where possible, it had been necessary to shift spending to help manage demand for homelessness services given the poor 36 C&AG’s Report, para 2.6 37 C&AG’s Report, para 2.6 38 LGFS0006 39 Q 64 40 Q 104 41 Q 104 42 Q 104; MHCLG, Homelessness Prevention Grant 2025–26: technical note, 18 December 2024 14 outcomes for people in temporary accommodation.43 MHCLG told us that pooling of funding in a place, flexibility of funding and the right performance measures can help improve outcomes for people over time.44 43 Qq 63, 104 44 Q 104 15 2 Government’s response to local funding pressures National Insurance Contributions (NICs)
Government Response Summary
The government confirms its commitment to prevention-focused public sector reform, stating the recommendation is implemented and detailing significant investments already made or committed through the 2025 Spending Review in children's social care, crisis support, homelessness, and community partnerships.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 As outlined in HM Treasury’s Permanent Secretary’s letter to the Committee on 7 August 2025, the government’s approach to public sector reform is informed by a focus on prevention. This will improve outcomes for communities as well as reducing reliance on expensive crisis management. The government is therefore committed to supporting local government to invest in prevention by resetting the government’s relationship with the sector and investing in prevention-focused reform in key service areas. 3.3 As set out at Spending Review 2025, the government is providing targeted investment in prevention-focused reforms in specific service areas. This includes: • Children’s social care: investing over £500 million from the Transformation Fund over the Spending Review 2025 period to help more children stay with their families. • Crisis and Resilience Fund: providing £842 million a year in the first ever multi-year settlement to transform the Household Support Fund into a new Crisis and Resilience Fund. • Homelessness: providing £39 billion for a new Affordable Homes Programme and £100 million for early interventions to prevent homelessness and £950 million of capital investment for a fourth round of the Local Authority Housing Fund. • Community help partnerships: investing £100 million alongside other spending across government to provide a step-change in the government’s support for adults with complex needs. 3.4 The government recognises the importance of preventative services in contributing to the financial sustainability of local authorities while improving outcomes for vulnerable people. As noted in the response to recommendation 2, the government is also committed to reducing ringfences and the micromanagement of grants. 3.5 The government will set out further detail on its approach at the provisional Local Government Finance Settlement.