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

Highways Supervisor

London Borough of Richmond upon Thames and London Borough of Wandsworth
£44982 - £54500
Job Title Highways Supervisor... Richmond
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Communication Support Worker

Durham County Council
£33,673 - £37,563 pro rata
Required – Temporary, grade 8, term time only plus 2 weeks.  8 hours per week until 31 August 2027. Are you looking or a role in school supporting th Durham
Recuriter: Durham County Council

Outreach Workers

Durham County Council
Grade 6 £29,071 - £32,046
We are looking for enthusiastic and committed practitioners to join our Family Hub Teams supporting children and Families to deliver services in comm Peterlee
Recuriter: Durham County Council

School Admin Officer

Durham County Council
£26,403 - £28,598 pro rata (pay award pending)
Required to work term time only plus 2 weeks during summer holidays. 8am-4pm. Wingate Nursery School is looking for an exceptionally organised, warm, Wingate
Recuriter: Durham County Council

Cleaner

Durham County Council
£24,796 pro rata (pay award pending)
Required to work 12 hours per week, 05.30-08.00 or 15.30-18.00 Monday-Friday, Term Time plus 3 weeks to be worked during school holidays. We are seek Durham
Recuriter: Durham County Council
Linkedin Banner