English councils received at least 448 individual government
grants between 2015/16 to 2018/19 in an increasingly “fragmented
and reactive” use of public funding, a new study by the Local
Government Association reveals.
Councils in England have seen their core funding from central
government reduce by £15 billion in the last decade. In recent
years, they have seen a rise in the number of short-term,
ring-fenced, small grants they receive annually from government
departments and agencies.
The LGA is calling for the Government to use the Spending Review
to end this fragmented funding of council services and meeting
demand pressures through individual grants. It has set out how
the Government can provide £10 billion in additional core funding
to councils to protect and improve services.
For the first time, analysis commissioned by the LGA has mapped
out the grants issued by central government to councils, combined
authorities, and fire and rescue authorities in England between
2015/16 to 2018/19.
This has found:
- In any given year, councils received around 250 grants - this
compares to around 61 main grants paid to local authorities in
2013/14.
- More than a third were discontinued from one year to the next
– this is creating negative impacts on staff retention, long-term
strategic planning, and joint commissioning.
- Almost a quarter of grants issued each year were worth less
than £1 million – each one equating to less than 0.25 per cent of
the budget for a typical metropolitan district or London borough.
- Around a third of the grants were awarded on a competitive
basis. Often more is spent by councils in preparing bids at
hugely short notice than they stand to receive back.
The LGA said many grants received by councils each year are
designed to try and manage rising levels of demand pressures.
For example, homelessness services have been issued with 12
short-term funding grants since 2015 - half of these were
allocated through a competitive process. This is placing extra
stress on an over-stretched homelessness system, as officers are
often required to scope and complete an extensive application
within limited timeframes – sometimes as short as one month.
The LGA is calling for the Government to use the Spending Review
to signal an end to this inefficient and reactive way of funding
vital local services and tackling demand pressures. Instead
helpful additional funding for councils should be delivered
through primary sources of local government funding rather than
individual programmes.
It wants the Government to reserve targeted funding for
transformational purposes, including genuine pilots, and provide
councils with long-term certainty by issuing funding through
multi-year settlements tied to the life of a parliament.
Cllr , Chair of the
LGA’s Resources Board, said:
“The use of short-term grants is increasingly representing poor
value for money. Councils need certainty to plan local services
without the added burden of navigating a complex and fragmented
funding landscape.
“If fragmentation and ringfencing of grants is reduced, councils
can provide much better value for the same amount of funding and
provide services which prevent crises from happening, rather than
simply managing them when it is too late.
“The Government needs to use the Spending Review to radically
re-think public spending in a way that is fit for the future and
empowers councils to deliver on the ambition for our communities
that central and local government share.”
NOTES TO EDITORS
- Councils in England face a funding gap
of more than £5 billion by 2024 to maintain services at current
levels - this figure could double amid the huge economic and
societal uncertainty caused by the COVID-19 pandemic. The
LGA’s
detailed submission to the Comprehensive Spending Review
sets out how £10 billion is needed to not only plug this gap
but meet growing demand pressures and improve services for
communi t! ies.
- Read the LGA’s report – Fragmented funding: the
complex local authority funding landscape.
