In a report on the “new burdens doctrine”, which is intended to ensure that any central government polices that increase council spending or reduced their income were assessed and funded by Whitehall departments, the National Audit Office said underfunding presented a risk to town halls. If the government failed to apply the doctrine properly, local authorities would have to meet additional costs of centrally mandated policies.
However, the NAO concluded the Department for Communities and Local Government needed to improve its understanding of whether new duties being placed on town halls were being fully-funded.
Examples of new burdens examined in the report included the introduction of a right to free early education for disadvantaged 2-year-olds and transferring funding for local welfare assistance.
Although DCLG provided guidance for initial assessments of the extent of new burdens, it had “not encouraged” other departments to subsequently review these to ensure the regime operated fairly for local authorities.
This is despite a pledge in the published guidance that reviews would take place to ensure that money provided was sufficient.
“Departments should review uncertain assessments after introducing changes to ensure local authorities get the right funding,” the Local government new burdens report stated.
“The guidance says the department will select up to six assessments for independent post-implementation review each year, and discuss with departments their approaches to doing assessments. We found no reviews or learning had taken place since 2009.”
However, the report did find that DCLG had effective ways to find out about potential new burdens from across government, and councils did have opportunities to raise concerns.
Auditor general Amyas Morse also said that DCLG had taken steps since November 2014 to improve its understanding of new burdens on local authorities.
“But it needs to use intelligence from the new burdens regime to improve its understanding of the pressures affecting authorities’ financial sustainability,” he added.
Responding to the report, Claire Kober, chair of the Local Government Association’s resources board, said the sector had worked hard to save billions while protecting services for residents in recent years, and had been effective at implementing new government policies.
“As this report rightly recognises, it is wrong for councils to have to reduce spending on vital services, such as caring for the elderly, collecting bins and fixing our roads, to meet the costs brought about by changes to national policy.
“Funding for recent new burdens, such as the increase in Deprivation of Liberty Assessments and the new Local Government Transparency Code, was not received by councils before they incurred new costs. This has added significant pressure on local services.”
A DCLG spokesman said the NAO “recognises our proportionate approach to minimise administrative burdens on departments while ensuring financial burdens on councils are scrutinised”.
He added: “The government draws intelligence from a wide range of sources across Whitehall and beyond – including bodies like the LGA, Ofsted and the Care Quality Commission as well as local auditors – to fully understand the impact of new burdens on town halls.
“Ministers also regularly meet with council leaders, councillors and council officials to discuss local governance issues.”
