DCLG savvy questioned again as PAC weighs in behind NAO
0Ministers lack the understanding necessary to guarantee all local authorities can maintain their statutory services, according to the Public Accounts Committee (PAC).
A report into the sustainability of local government finances this week backed a recent study by the National Audit Office which concluded the Department for Communities and Local Government has a poor grasp of the impact of spending cuts on councils.
PAC’s report said the department should adopt a targeted approach to monitor more closely the financial sustainability of councils and the highest risk of financial failure.
Committee chairwoman Margaret Hodge said: “[The department] looks only at data on spending and has little information on service levels, service quality, and financial sustainability.
“Without at least an idea of the amount of funding required to maintain statutory services to a minimum standard, it is hard to see how the department could ensure that local authorities are able to fulfil their statutory duties.”
The committee’s report also called for the government to introduce multi-year finance settlements for local authorities.
Paul Woods, chief finance officer at the North East Combined Authority, submitted evidence to the inquiry on behalf of Newcastle City Council.
He said: “The answers given by officials before this committee demonstrated that they are still not on top of the implications of the grant cuts.”
He criticised evidence given to the committee by DCLG permanent secretary Bob Kerslake, who explained the reason that the most grant-dependent authorities have received the biggest cuts as a “piece of arithmetic”.
Woods said: “Any professional knows that the current grant system is anything but simple. To brush it off as simple arithmetic is insulting to the professionals, the politicians and the public.”
He added that answers given by communities secretary Eric Pickles to a session of committee before Christmas led him to believe the government would ignore the PAC’s recommendations.
He said: “He was asked if the department would publish a cumulative impact assessment on the cuts and his simple answer was no.
“He also said he didn’t understand the difference between statutory and discretionary services. This is two years after the NAO recommended the department should develop a detailed understanding of the impact of cuts on statutory services. Either this hasn’t been done, or officials have done it and failed to inform the secretary of state.”
However, local government consultant Stephen Fitzgerald urged caution over criticising central government for its lack of monitoring of local government spending.
He said: “For some time now local government has been pushing for more accountability and more devolved responsibilities.
“If we believe in localism, with councils democratically accountable to their local electorates rather than the mandarins of Whitehall, then we don’t want civil service apparatchiks stomping round the country scrutinising performance. We had enough of that with the Audit Commission!
“You can’t have it both ways, though people often try. It is important that the right balance is found between a truly localist approach and central government having the information available on which to base the financial decisions that affect local authorities”
Photo (cropped) by Eric Hossinger
