A parliamentary committee is set to consider whether the local government finance system in England is fit for purpose.
In a new inquiry, the Housing, Communities and Local Government Committee will ask how well ministers understand the consequences of funding and mandatory service decisions.
The cross-party committee will consider whether the current system allows councils to make ‘sensible long-term choices’ about their finances, and what the impact of forthcoming multi-year funding settlements will be.
MPs will also hear evidence about whether the current regime for responding to councils in financial distress has helped councils to stabilise their finances.
They will consider if there are specific circumstances that have led some councils into financial distress and others to keep their budgets balanced.
Evidence will be heard from February, with witnesses likely to include locally elected representatives, finance directors, and local government secretary Angela Rayner.
Committee chair Florence Eshalomi said: ‘The state of many councils’ finances in England is at breaking point.
‘Funding shortages will inevitably be a central question of our inquiry but we will want to bring forward practical recommendations for Government so they can empower councils to deliver for their communities.’
