Local government financial sustainability

We recommend that MHCLG build on recent announcements to develop a whole-system approach to local government financial sustainability. This approach would consider interdependencies and consequences across services and departmental boundaries and should be underpinned by clear expectations of local government. It should do this by: ? taking the lead in building a cross-government approach to local government financial sustainability ? for this to be effective and to improve understanding of the wider impact of their choices on local authorities, other government departments must have an up-to-date understanding of the priorities, pressures and opportunities across services local authorities are expected to deliver;

Ref Page 13, Recommendation A, Bullet 1 · Implemented Q4 2028-29

We recommend that MHCLG build on recent announcements to develop a whole-system approach to local government financial sustainability. This approach would consider interdependencies and consequences across services and departmental boundaries and should be underpinned by clear expectations of local government. It should do this by: as part of the spending review, developing a plan for funding and service reform to address the financial and demand pressures on local authorities, focusing on long-term value for money underpinned by clear priorities across departmental boundaries.

Ref Page 13, Recommendations, a, bullet two · Implemented Q4 2028-29

We recommend that MHCLG: explore how the impact of preventative services can be evaluated and incentivised to deliver better outcomes and improved value for money

Ref Page 14, Recommendation, b, bullet one · Implemented Q4 2028-29

We recommend that MHCLG: work with the local government sector to improve the transparency and consistency of local authority reporting on reserves to aid understanding of local authorities? overall financial positions;

Ref Page 14, Recommendations, b, bullet two · Implemented Q4 2028-29

As part of the spending review, and to support a cross-departmental approach, we recommend that HM Treasury: work to provide a spending framework that supports the government?s plans for local government funding and service reform

Ref Page 14, Recommendations, c, bullet one · Implemented Q4 2025-26

We recommend that MHCLG: as a matter of urgency, work with DfE to support local authorities to sustainably manage their dedicated schools grant and address the cumulative deficits before the statutory override ends on 31 March 2026.

Ref Page 14, Recommendations, b, bullet 3 · Implemented Q4 2025-26

As part of the spending review, and to support a cross-departmental approach, we recommend that HM Treasury: incentivise government departments to invest in preventative services to deliver better outcomes and improved value for money

Ref Page 14, Recommendations, c, bullet two · Implemented Q4 2025-26