MPs ‘to scrutinise local authority finances’

18 Feb 19

A wide-reaching parliamentary inquiry is likely to be launched into local government finances, the chair of the housing, communities and local government select committee Clive Betts has revealed to PF. 

The parliamentary inquiry would be a “major piece of work” into the current squeezed finances of local government, Betts told PF.

“I think at some point we will go on and look at the whole issue of local government finance before the Spending Review – I think it will be right that we inform that,” he said, as part of an interview to be published in next month’s PF magazine.

He added: “It will be a major piece of work – we haven’t formally announced it yet – but I think our intention is clear.” He did not say when it would be launched.

Betts explained to PF the importance of such an inquiry, warning if councils were forced to keep upping their council tax and simultaneously cut services “there is increasing danger of a disconnect between the public and their councils”.

CIPFA chief executive Rob Whiteman said: “CIPFA will always advocate for making strong, well-evidence changes to strengthen local government finance and put it on a sustainable footing.”

He explained experts, such as director of LSE London Tony Travers, had been warning of local government sustainability “for 40 years”.

“CIPFA’s own independent local government finance commission have been making recommendations, all along remarkably similar lines, without government paying any attention,” he added.

Whiteman called for a Spending Review – to be held later this year - that encourages “radical and bold changes” including greater devolution, and a fiscal system, “supports and incentivises a high performing local government”.

In a recent debate on the 2019-20 local government finance settlement, Betts implored fellow MPs to stand up for local government and “ensure it does better in the next Spending Review and has a better allocation of resources”.

He also urged that “resources are fairly delivered” in reference to the ongoing Fair Funding Review, which will set new baseline funding allocations for local authorities based on relative needs and resources. 

In the debate in the House of Commons he said: “I accept that this is a difficult and complicated job, but the government needs to be very careful that the process does not become seen as an exercise in financial gerrymandering – that would be very sad for local government.”

The government is planning to implement the outcome of the review in 2020-21.

PF previously reported on council leaders in England who expressed their pessimism over the Fair Funding Review.

A recent Public Accounts Committee report found that central government is “in denial” about the sustainability of local government finances.

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