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

Team Manager

Durham County Council
Grade 14 - £50,269 - £54,495
Two vacancies has arisen within Adult and Health Services for a Team Manager working in the Chester Le Street Health Centre/Derwent Clinic and Enterpr Durham
Recuriter: Durham County Council

Commercial Waste Account Manager

Durham County Council
£38,220 - £41,771
Refuse and Recycling Services are looking for a Commercial Waste Account Manager to join their team   WHAT IS INVOLVED? Working with a significant deg Peterlee
Recuriter: Durham County Council

Head of Drama Teacher

Durham County Council
£32,916- £51,048 + 8,611
Head of Drama Teacher MPS-UPR + TLR2c- £32,916- £51,048 + 8,611 Required to start 01/09/2026.   The performing arts is central to life at Belmont Comm Durham
Recuriter: Durham County Council

Human Resources Officer Advice and Support

Durham County Council
£35,412 to £39,152 p.a. pro rata (Grade 9)
  This is an exciting opportunity to join the HR Advice and Support service supporting the delivery of professional HR advice and support in conjuncti Spennymoor
Recuriter: Durham County Council

Senior Product Manager - Social Care

Essex County Council
£63323.0000 - £74497.0000 per annum
Senior Product Manager - Social CareFixed Term, Full Time£63,323 to £74,497 per annumLocation
Recuriter: Essex County Council
Linkedin Banner