MPs to examine local government finance

6 Mar 19

The housing, communities and local government select committee has confirmed it will scrutinise council finance - after PF reported its plans last month. 

An inquiry was launched today that will look into current local government finance systems. 

It will also examine how central government arrives at its spending decisions for local government and how it assesses local need, the MPs said.

In a recent interview with PF Clive Betts revealed his plans to launch such an inquiry. The full interview will be published on the PF website on Friday.

The HCLG committee said: “The inquiry will consider how effective the existing funding set-up for local government is in providing resources to meet need and demand for local services both now and in the future.”

The committee’s work will seek to inform government policy in the Spending Review – for which a date is yet to be set.  

Betts said: “As the government this week announced targeted funding to some struggling local areas, and ahead of the forthcoming Spending Review, it is the perfect time to look at the bigger picture of local government funding.”

A £1.6bn Stronger Towns Fund was announced on Monday for less affluent parts of the country. The three areas receiving the most funding were the North West (£281m), West Midlands (£212m) and Yorkshire and Humber (£197m).

“We have launched this inquiry to understand the impact of the current arrangements for funding local government services, and the effects this has in different areas, with different challenges and demands – the total local funding and how this is calculated.”

The committee said it is inviting submissions on:

  • lessons that can be learned from past changes to local government funding
  • efficiency and sustainability of the current system (including central government funding, business rates retention, council tax)
  • the current and forecast funding needs of local government and how these needs can be better understood at both a national and local level
  • the approach government should take to local government funding as part of the 2019 Spending Review.

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