• Home
  • About
  • 151 IMPACT AWARDS
  • Subscribe
  • Conference
  • Events Calendar
  • Webcast151
  • MOTB
  • Log In
  • Register

Room 151

Impact Awards –>
  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews

SURVEY RESULTS: Officers expect no extra cash from Fair Funding Review

0
  • by Editor
  • in 151 News · Funding
  • — 28 Mar, 2019

An overwhelming majority of senior council finance officers believe that the Ministry of Housing, Communities and Local Government’s (MHCLG) Fair Funding Review will result in a reshuffle of existing resources rather than an increase in the level of funding available, according to research conducted by Room151.

The Room151 2019 Current Affairs Survey gauged the sentiment of more than 150 chief finance officers, their deputies and other senior officers with non-statutory roles at UK councils.

Ninety percent of respondents said they believed the outcome of the MHCLG’s review of relative needs, resourcing and baseline allocations for local authorities in England would be “mostly a redistribution” ahead of this year’s Spending Review.

Just under 10% anticipated a “modest increase” in the quantum of resources available, and none believed there would be a large increase in the 2020-21 funding period.

Earlier this month, Institute for Government researcher Chris McNulty said prime minister Theresa May’s October 2018 Conservative Party assertion that public-sector “austerity” was coming to an end was a projection that would largely bypass councils.

McNulty said in a Room 151 blog that research indicated that the NHS, defence and international development would be the chief beneficiaries of increased public spending with councils still left having to deliver “more with less”.

Room151’s Current Affairs Survey asked respondents how they felt different types of council would be affected by the Fairer Funding Review.

Lower tier authorities were perceived to be most at risk of losing out as a result of the review, with almost 59% of respondents expecting them to be worse off to some extent. London boroughs were also seen as likely losers by 29% of the survey cohort.

At the other end of the scale, sentiment in relation to county councils was significantly more positive, with two-thirds of respondents expecting them to be better off as a result of the review.

Business Rates reform due to take effect from April 2020 will shake the local authority funding landscape up further. The proportion of National Non-Domestic Rates (NNDR) councils are allowed to retain will increase from 50% to 75% as part of a longstanding carrot-and-stick policy to place increased focus on local authorities as the drivers of jobs and economic growth by making it a more direct form of finance than central government grant.

Two-thirds of respondents to the Current Affairs Survey said they believed their authority could play a significant role in driving business rates growth, although there was a muted expectation that the policy would favour some areas more than others.

Almost 40% of respondents said they believed authorities outside of south east England would be penalised by business rates retention; just under 25% did not. The remaining 35% said they did not know.

Last month the Institute for Fiscal Studies warned that the pending reforms posed significant risks to local authority finances and that MHCLG still had work to if it was going to properly address them.

Valuation changes brought about by appeals was one area of concern. The thinktank said MHCLG’s description of its proposals for how councils could protect themselves was “confusing, imprecise, and appears to be internally inconsistent”.

Elsewhere in the report, senior finance officers predicted that housing would be the asset type attracting most investment over the next few years, replacing commercial property.

Two-thirds of respondents picked new homes as the go-to choice, almost treble the 22.5% who maintained that commercial property would retain its current attraction. Six-and-a-half percent named energy as their prime-focus asset type.

The 2019 Current Affairs Survey found 52% of senior finance officers expressing concerns that councils are overexposed to shopping centres and other retail investments.

Fifteen percent said they believed some authorities had got their commercial investment strategies “spectacularly wrong” and expected to see councils unable to balance their books as a result.

Only 12% said they did not believe failed commercial strategies would force any councils to issue section 114 notices; the remainder maintained that it was too early to say.

In January this year the National Audit Office (NAO) urged local government auditors to be on the lookout for councils attempting to manipulate their balance sheets in order to justify commercial ventures.

The general power of competence introduced in the Localism Act 2011 has made it easier for councils to undertake commercial activity, the NAO said.

But it warned: “This power does not override the need for authorities to comply where there is already an existing legal duty, for example, compliance with the capital financing regulations.”

Last year Northamptonshire County Council issued an unprecedented two section 114 notices.

Get the Room 151 Newsletter

Room151 Conferences & Events

Share

You may also like...

  • Bonds agency seeks outsourced solution to achieve first bond launch Bonds agency seeks outsourced solution to achieve first bond launch 8 Aug, 2019
  • LGA announces bond agency team LGA announces bond agency team 9 Sep, 2014
  • Aberdeen’s £370m bond journey Aberdeen’s £370m bond journey 18 Jan, 2017
  • Portsmouth eyes borrowing boost to buy office development Portsmouth eyes borrowing boost to buy office development 13 Jun, 2019

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 7 hours ago

    Impact Awards: Liverpool’s cafe culture and Warrington’s investment in homes: The CCLA/Room151 Impact Awards showcase  finance teams with a direct impact on their local communities and the environment. This week we spotlight Liverpool City Council’s… dlvr.it/RxJsKb pic.twitter.com/dEYpaz6HP0

    Room151 10 hours ago

    Doing something in #localgov #finance for housing or regeneration? Check out the 'Place Shaping' category room151.co.uk/impact-awards/… sponsored by @31tenConsulting in the CCLA/Room151 Impact Awards. #timetoenter !! pic.twitter.com/dU99vE6Wws

    Room151 1 day ago

    Doing something in #localgov #finance for Adult Social Care & Health? Check out the ASC&H category room151.co.uk/impact-awards/… sponsored by Fundamentum Social Housing REIT in the CCLA/Room151 Impact Awards. #timetoenter !!

    Room151 1 day ago

    Doing something in #localgov #finance for the environment? Check out the 'carbon management' category room151.co.uk/impact-awards/… sponsored by @ACSLLP in the CCLA/Room151 Impact Awards. #timetoenter !!

    Room151 1 day ago

    So what are the seven categories for the CCLA/Room151 Impact Awards? Here they are room151.co.uk/impact-awards/… #localgov #finance #outcomes

    Room151 1 day ago

    Why should LGPS be concerned about rising inflation?: The impact of the coronavirus pandemic, lockdown and wider economic uncertainty created  deflationary pressures which raise important considerations for the Local Government Pension Scheme writes… dlvr.it/RxF7Fs pic.twitter.com/JlcjROBIpz

    Room151 2 days ago

    JOB ALERT: LPFA Finance Director vacancy: London Pensions Fund Authority Finance Director and s151 Officer Competitive salary and benefits The largest Local Government Pension (LGPS) provider in London with around £6.5 billion of assets and 135[...] dlvr.it/RxBdJP

    Room151 2 days ago

    Richard Harbord: Further signs that local government finance is failing: The crisis in Liverpool and a fix for education budgets are further indication that local government finance is in need of a root and branch review. Even for those students[...] dlvr.it/Rx9PSV pic.twitter.com/sAanC2gEyu

    Room151 1 week ago

    Impact Awards: Finance helps launch school meals company and support business during lockdown: The CCLA/Room151 Impact Awards will showcase the way finance teams have a direct impact on their local communities and the environment. This week we spotlight… dlvr.it/RwnlF4 pic.twitter.com/AJhne1MVG4

    Room151 1 week ago

    "This work has made a vital, practical contribution to ensuring people have been supported through the pandemic." #impact #151awards #covid #s151 room151.co.uk/treasury/impac… #impactcasestudies #councilfinancemakesadifference

    Room151 1 week ago

    room151.co.uk/impact-awards/ #passiton #localgov #s151 #151awards pic.twitter.com/A0uO0dwBkM

    Room151 1 week ago

    Financial pressures loom for 2023 and beyond: Kate Ogden writes the government has addressed most of the short-term Covid-19 financial pressures facing English councils, but problems loom in 2022-23 and the years following. As we enter the[...] dlvr.it/RwfDsz pic.twitter.com/hpv2R09w75

    Room151 2 weeks ago

    Calling all #localgov finance officers and #s151s room151.co.uk/impact-awards/ It's the #151Awards Thanks to the @LGALocalism for helping us get the word out along with all the LA treasury societies. pic.twitter.com/Nkal9BrH1J

  • Categories

    • 151 News
    • Agent 151
    • Blogs
    • Chris Buss
    • Cllr John Clancy
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Forum
    • Funding
    • Graham Liddell
    • Ian O'Donnell
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • LGPSi
    • Mark Finnegan
    • Recent Posts
    • Resources
    • Richard Harbord
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Treasury
    • Uncategorized
  • Archives

    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story A local income tax could empower councils – but there’s no free lunch
  • Next story Bonds agency turns to councils for help on first issue

© Copyright 2021 Room 151. Typegrid Theme by WPBandit.