William Eichler 04 July 2018

Whitehall accused of ‘complacency’ over financial future of local government

Whitehall accused of ‘complacency’ over financial future of local government   image

MPs have blasted the Government for being ‘complacent’ about the financial future of local authorities.

A new report has criticised the Ministry of Housing, Communities and Local Government for being ‘overly reliant’ on a favourable outcome from the 2019 Spending Review to address the local government sector’s financial problems.

Published by the Public Accounts Committee (PAC), the report accuses the department of not developing a plan to secure the ‘long-term financial future’ of councils, despite the fact they are facing a funding gap of over £5bn by the end of the decade.

The report comes after communities secretary James Brokenshire failed to make a firm commitment to fighting for more funding for councils at the Local Government Association's (LGA) annual conference.

The PAC report also criticised the department for a lack of transparency.

‘It is not transparent enough about its understanding of the pressures faced by local authorities, meaning Parliament and the taxpayer cannot be sure that it genuinely understands or is addressing the issue,’ the report states.

‘It is no secret that councils are under the cosh. The mystery is how central Government expects their finances to improve when it has such an apparently shaky grasp of the issues,’ commented committee chair, Meg Hillier MP.

‘It beggars belief that the department responsible for the local government financial framework, and which takes the lead in assessing councils’ funding requirements, has neither an agreed measure of sustainability nor a clear definition of “unsustainable”.

‘These are fundamental weaknesses in its approach to assessing the financial risks facing councils and the sector as a whole – risks that, as the evidence bears out, are clear and pressing.’ 

‘Many councils have been forced to plunder their reserves to keep essential services going, and made deep cuts to spending in other important areas. The council funding gap is likely to top £5bn by the end of the decade,’ Ms Hillier continued.

‘Clearly, this is not sustainable. There is only so far the elastic can be stretched before it snaps. Yet, as our report makes clear, central government’s response to this looming crisis smacks of complacency.’

Responding to the report, an MHCLG spokesperson said: 'Local authorities are responsible for their own funding decisions, but over the next two years, we are providing councils with £90.7bn to help them meet the needs of their residents, including social care.

'We recognise the pressures councils are facing, so we are working with local government to develop a funding system for the future.

'On top of this, we are giving them the power to retain more of the income they get from business rates so they can use it to drive further growth in their area.'

Highways jobs

Senior Manager – Older Adults – Residential Care

Cumbria County Council
£68,709 - £71,218
This pivotal role requires leadership and management of the Council's twenty in house Residential Care services Carlisle, Cumbria
Recuriter: Cumbria County Council

Education, Health and Care (EHC) Co-ordinators

Buckinghamshire Council
£30,874 - £37,188 per annum
Interested in a career as an EHC Coordinator? Come along to our drop-in event to meet members of the SEND team and find out more about the role! England, Buckinghamshire, Aylesbury
Recuriter: Buckinghamshire Council

Interim Head of Housing and Regulatory Services

Tile Hill
£400-800 per day
Interim Head of Housing role working with an award winning council in the North West. North West
Recuriter: Tile Hill

Senior Technical Officer

Newport City Council
£30,507 - £33,799
We are pleased to be seeking individuals to fill a new Senior Technical Officer post within Highways.    Newport (Casnewydd)
Recuriter: Newport City Council

Assistant Director – Digital & Information and Communications Technology (ICT)

Wigan Council
Competitive Salary
The next phase of our digital journey must also reflect the ambitions across our organisations to drive forward at pace our agendas Wigan, Greater Manchester
Recuriter: Wigan Council

Local Government News

Latest issue - Local Goverrnemnt News

This issue of Local Government News explores how councils can tackle modern slavery and trafficking in their supply chains, finds out more about Cambridge's first cohousing scheme and the launch of a new project to build a shared service pattern library for local government.

This issue also contains a special focus on children's services and how councils are protecting children following local safeguarding children boards being abolished.

Register for your free magazine