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

Billing and Compliance Officer - Basildon Borough Council

Essex County Council
Up to £20.0000 per hour
Council Tax Billing Officer - Basildon Borough CouncilBasildon, Essex£20 per Hour PAYE / £25.65 Umbrella Full Time, Temporary Essex County Council (EC England, Essex, Basildon
Recuriter: Essex County Council

Senior Health and Safety Risk Adviser

North Yorkshire Council
£42,839- £47,181 per annum
Are you someone who is able to make impactful decisions? Selby, North Yorkshire
Recuriter: North Yorkshire Council

Senior Health and Safety Risk Adviser

North Yorkshire Council
£42,839- £47,181 per annum
Are you someone who is able to make impactful decisions? Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Fostering Panel Advisor

Durham County Council
Grade 13 - £47,181 - £51,356
This is a brilliant opportunity to join our Fostering Service in a brand-new role focused on supporting our Fostering Panels.   WHAT IS INVOLVED?    A Seaham
Recuriter: Durham County Council

School Crossing Patrol

Durham County Council
Grade 1 £3,979 (approx.) £12.45 per hour
Join our School Crossing Patrol Service! Are you punctual and reliable? Do you have good communication skills and a strong sense of community spirit? Durham
Recuriter: Durham County Council
Linkedin Banner