Whitehall under fire for “new burdens” failure

Central government departments are failing to monitor the effectiveness of a mechanism designed to ensure that councils are properly compensated for new burdens put on them, according to the National Audit Office.

A report released this week by the NAO recommended a number of improvements to the “New Burdens Doctrine” backed by the coalition government in 2011, and overseen by the Department for Communities and Local Government.

The doctrine, based on existing civil service practice, formally requires that all new burdens on local authorities must be properly assessed and fully funded by the relevant department.

Amyas Morse, head of the National Audit Office, said today: “The Department for Communities and Local Government has taken steps since November 2014 to improve its understanding of new burdens on local authorities.  But it needs to use intelligence from the new burdens regime to improve its understanding of the pressures affecting authorities’ financial sustainability.”

The report found “limited evidence” that departments had undertaken or even planned reviews of their new burden assessments.

“Without specifically reviewing their new burden assessments, departments will not test whether their initial assessments of financial impact were accurate in the light of experience,” the report said.

“They will also miss the opportunity to reflect on what went well and what did not go well with the process, to apply and share learning for future assessments.”

The problem is compounded by the fact that initial estimates are often wrong because of the difficulties councils face in estimating the volume and cost of new responsibilities, the report found.

It said: “Data limitations lead to uncertainty in assessments which increases the risk that local authorities will not be appropriately funded for new burdens.”

According to the report, DCLG only began routinely monitoring burdens since November 2014, prior to which its system for recording and tracking action was “weak”.

The system also risks insufficiently scrutinising new burdens that have a low impact overall but which have a disproportionate effect on some local authorities, it said.

Currently, new burden assessments are not published, meaning local authorities cannot discover how funding is calculated according to the report.

However, the NAO praised departments for generally consulting well with councils over new burdens, through surveys, workshops and regional events.

Claire Kober, chairman of the Local Government Association’s Resources Board, said: “Funding for recent new burdens, such as the increase in Deprivation of Liberty Assessments and the new Local Government Transparency Code, was not received by councils before they incurred new costs. This has added significant pressure on local services.

“The NAO’s helpful recommendations would improve the new burdens process and address the lack of transparency which has been a source of frustration among local authorities.

“We would urge the government to go further and ensure new burdens are properly assessed and paid before councils incur any new costs to ensure other local services do not suffer as a result.”

Photo (cropped)  Andy Aldridge, Flickr