Dan Peters 05 October 2020

Fragmented council funding risks to value for money, report warns

The increasing fragmentation in council funding ‘undermines central government’s understanding of service delivery’ and ‘risks impeding value for money,’ a report has warned.

Research for the Local Government Association (LGA) found at least 448 unique grants were issued to the sector between 2015/16 and 2018/19, with more than 50 worth less than £1m – less than 0.25% of the budget for a typical metropolitan district or London borough.

The increasing number of grants comes as the total amount of grant funding from central government decreases – falling by 16% from £83.1bn in 2015/16 to £69.9bn in 2018/19.

Researchers TRL Insight also found almost a third of grants were competitive - which the LGA said placed ‘additional stress on an over-stretched system’ - and more than a third were discontinued from one year to the next.

The report read: ‘The fragmentation in local government funding undermines central government’s understanding of service delivery as a whole.

‘The largely short-term basis for local authority grants has undermined the ability of councils to plan strategically for the long-term.

'It limits time for commissioning, and risks harming the quality and value for money of the service by forcing councils to develop strategies for closing down services in the event that funding is discontinued.’

The report went on: ‘Overall, the increasing fragmentation in local government funding risks impeding value for money – both from the administrative burden it poses on councils and from the detrimental impact on the outcomes that could be achieved for communities.

‘A trend towards targeted funding has reduced the ability of councils to flexibly deliver local priorities for local people, and has not led to effective oversight or control of the delivery of central government’s priorities.’

The LGA’s submission to the Spending Review published last week called for an end to the fragmentation of funding.

A Ministry of Housing, Communities and Local Government spokeswoman said: ‘It is right the majority of council funding is not ring-fenced to enable councils to focus on local priorities and manage their finances effectively but it is sometimes appropriate to provide targeted funding for specific purposes.

'The Spending Review is our opportunity to look at funding for local government in the round.’

SIGN UP
For your free daily news bulletin
Highways jobs

Director of City Infrastructure

Brighton & Hove City Council
circa £125,000
There are few places like Brighton & Hove Brighton & Hove
Recuriter: Brighton & Hove City Council

Family Worker (Link Role) - 12 month Fixed Term Contract

Essex County Council
£33049.00 - £37698.00 per annum + + 26 Days Leave & Local Gov Pension
Family Worker (Link Role)Fixed Term, Full Time£33,049 to £37,698 Per AnnumLocation
Recuriter: Essex County Council

Head of Finance - Children & Young People’s Service

Rotherham Metropolitan Borough Council
£75,585 - £80,726 (pay award pending)
This is a great place to work for people who want to make a real difference. Riverside House, Rotherham, South Yorkshire
Recuriter: Rotherham Metropolitan Borough Council

Sessional Learning Delivery Assistant

Durham County Council
Grade 7
Durham County Council
Recuriter: Durham County Council

Business Support Assistant

Essex County Council
Up to £25959.00 per annum
Business Support AssistantFixed Term, Full Time£25,959 Per AnnumLocation
Recuriter: Essex County Council
Linkedin Banner