SIGOMA respond to LUHC report on 'financial distress' in local authorities
Posted on February 05, 2024
Responding to the Levelling Up, Housing and Communities Committee’s report on financial distress in local authorities, Cllr Graham Chapman, vice-chair of the Special Interest Group of Municipal Authorities (SIGOMA), said:
This is a vitally important report that reveals the severe financial distress that local authorities are currently experiencing, in some cases to the point of insolvency. As the report concludes, it is critical that the next Government prioritises local government, especially the Children’s Social Care system, where the market is completely broken and the charges for looking after a single young person can rise to £1m per year.
The report also details how local government is underfunded, and how even this reduced funding is poorly distributed to the disadvantage of more deprived areas. We therefore support the Committee’s recommendations to distribute funding more fairly, to reset the business rates system which currently favours more affluent councils, to implement the delayed Fair Funding Review, and the proposal for a fundamental reform of the Council Tax system. The first step to financial sustainability will be to close the funding gap identified in the report, and ensure additional funding goes to where it is needed most.
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Cllr Graham Chapman gave oral evidence on behalf of SIGOMA on 8th November. The transcript is available here. SIGOMA also submitted detailed written evidence to the committee.
Read coverage of our response in the follow publications:
LGC: Fresh calls for ‘fundamental reset of local government funding
Public Finance: MPs call for reform of ‘broken’ council funding model
The MJ: MPs demand fundamental reform of council funding
LocalGov: Council financial crisis ‘out of control’
Room 151: Fix ‘out-of-control’ financial crisis or well-run councils will go bust, say MPs