Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Accepted
MHCLG acknowledges insufficient funding, aiming for efficiency and demand management amid uncertainties.
Recommendation
We challenged MHCLG as to whether its reforms will put local government finance on a sustainable footing. It acknowledged that there was not enough money in the system, so the aim of the reforms was to use the money available more efficiently and productively. But MHCLG also recognised the need to manage the demand pressures on local government and referenced planned reforms for children’s social care, SEND, homelessness and adult social care (the Casey Commission).82 It asserted that its approach was the right one, but with the caveat that it did not know the outcome of the spending review and international events could affect the overall economic position.83
Government Response Summary
The government accepts the recommendation, outlining plans by end of 2025 as part of the multi-year Local Government Finance Settlement, including the Fair Funding Review 2.0, funding simplification, and reforms for children's social care, adult social care, SEND, and homelessness.
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, establishing 15 national outcomes... To simplify local authority funding... the government intends to bring together grants from across departments into large ringfenced consolidated grants... 2.3 The government also proposes to simplify existing Settlement grant funding, including for adult social care... 2.4 The upcoming multi-year Settlement will pave the way for further consolidation in future years. 6.1 The government agrees with the Committee’s recommendation. Target implementation date: end of 2025. 6.2 The government issued invitations to councils... to submit proposals for unitary local government on 5 February 2025... 6.3 On 20 June 2025 the government published the Fair Funding Review 2.0 consultation, which invites views on proposals to reform local government funding... including proposed transitional arrangements. The government is committed to providing the sector as much certainty as possible... followed by a multi-year provisional Local Government Finance Settlement later this year. 6.4 The government agrees with the Committee’s recommendation. Target implementation date: end of 2025. 6.5 The government will provide further details on funding to support local authorities with key service pressures at the provisional Local Government Finance Settlement later in 2025. 6.6 The government is committed to reforming children’s social care... 2025 Spending Review confirmed over £2 billion over the next three years... 6.7 For adult social care, the Spending Review allows for an increase of over £4 billion in 2028-29... 6.9 Baroness Casey of Blackstock is leading an independent commission into adult social care... Phase 1 will report in 2026... 6.10 The Department for Education Spending Review settlement confirmed funding for reform of the Special Education Needs and Disabilities (SEND) system... 6.11 The government invested £1 billion in homelessness and rough sleeping services in 2025-26... A long-term homelessness and rough sleeping strategy will be published later in 2025.