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The recent announcement by Michael Gove at the Local Government Association's annual conference has unveiled a new programme aimed at simplifying local government funding.
This initiative will see the selection of ten local authorities to test a new delivery method of capital funding. With the launch of this programme, the government aims to create a simpler landscape for local authorities to navigate when it comes to securing funds. By streamlining the delivery of capital funding, Mr Gove claims that local authorities will be able to better utilise existing funding pots from various programmes such as the Towns Fund, Levelling Up Fund, and Future High Streets Fund.
They will be free to make output, outcome and funding changes up to a threshold of 30% without having to seek any department approval at all.
The selection of simplification pathfinder pilots marks a significant shift towards granting local authorities more flexibility and autonomy over their projects. By allowing councils to spend their funding pots more flexibly, the government acknowledges that each area has unique needs and priorities. This approach aims to empower local authorities to tailor their projects according to the specific requirements of their communities, ensuring that funding is utilised in the most impactful and effective manner possible.
Mr Gove also emphasised the government's intention to move away from competition and towards allocation instead when it comes to funding distribution. While acknowledging the value of competition in driving innovation, he says the government recognises that an allocation-based approach can better address the needs of local authorities. Going forward, departments will be required to consider whether existing funds or an allocation method can be used to distribute money, reducing the administrative burden associated with launching new competitions and enabling a more efficient allocation of resources.
Selecting the right methodology for new funds is not a linear process, as different funding objectives means there is no ‘one-size-fits-all’ answer. Following the Levelling Up White Paper commitment to streamline the local funding landscape, this plan sets out our ambition for increasing the effectiveness and efficiency of the current funding system. By reducing administrative burdens, this plan will support local authorities to maximise their return on spending, generating the best outcomes for communities. - GOV.UK
He also announced the creation of the Office for Local Government to further reinforce the government's commitment to strengthening local governance. This new body will play a crucial role in identifying potential issues within councils at an earlier stage, allowing for proactive intervention when necessary. By identifying problems early on, the government can ensure timely and effective action is taken, thus enhancing local governance and improving outcomes for communities.
Acknowledging the need for reform, Mr Gove also highlighted the government's commitment to clearing the backlog in external audits and reforming the external audit system. By addressing these issues, the government aims to create a more robust and efficient auditing process that provides valuable insights to local authorities, enabling them to make informed decisions and improve financial management.
Full details of the plan can be found on the government website here.
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