UK Inquiry Tracker

Local Government Finance system: Overview and challenges

Public Accounts Committee Closed Inquiry

Opened: 21 Oct 2021 Closed: 7 Apr 2022 Parliament page

After a series of PAC reports on the state of local authority finances over the last year including on the system of local government audit ; local authority exposure to risky commercial investment and potential losses in Covid support schemes ; and the overall sustainability of the local authority finances … Read more

15 Recommendations

14 Conclusions

1 Report

1 Oral session

4 Letters

1 Event

Activity timeline 7 events

28 Apr
2022

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty Fourth report from Session 2021-22

21 Apr
2022

Correspondence

Correspondence from Jeremy Pocklington CB, Permanent Secretary, Department for Levelling Up, Housing and Communities, re the committee’s re…

22 Feb
2022

Correspondence

Correspondence from Jeremy Pocklington CB, Permanent Secretary, Department for Levelling Up, Housing and Communities, re Lessons Learnt, da…

2 Feb
2022

Report published

Thirty-Fourth Report - Local Government Finance System: Overview and Challenges

11 Jan
2022

Correspondence

Correspondence from Rt Hon Michael Gove, Secretary of State, Department for Levelling up, Housing and Communities Minister for Intergovernm…

11 Jan
2022

Correspondence

Correspondence from Catherine Frances Director General, Local Government, Strategy & Analysis Department for Levelling Up, Housing and Comm…

29 Nov
2021

Oral evidence

Local Government Finance system: Overview and challenges

Oral evidence sessions 1 session

29 Nov 2021

View on parliament.uk

Local Government Finance system: Overview and challenges

Alex Skinner · Department for Levelling Up, Housing and Communities Catherine Frances · Department for Levelling Up, Housing and Communities Jeremy Pocklington · Ministry of Defence Will Garton · Department for Levelling Up, Housing and Communities

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Thirty-Fourth Report - Local Government Finance System: Overview…	HC 646	2 Feb 2022	29	Responded

Recommendations & Conclusions

3 results

3 Recommendation Deferred

Thirty-Fourth Report - Local Gover…

The Department did not act with sufficient urgency, nor has it set out an overarching...

The Department did not act with sufficient urgency, nor has it set out an overarching plan and timetable, to address the severe and pressing problems with the local government audit market. Significantly delayed audits are a serious gap in local … Read more

Government Response

The department will update the Committee in spring 2022, after the outcome of the consultation Local audit framework and BEIS's response on the White Paper Restoring trust in audit and corporate governance have been published and the early stages of the procurement process completed.

HM Treasury

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12 Recommendation Deferred

Thirty-Fourth Report - Local Gover…

This Committee recently recommended the Department should set out a detailed plan and timetable for...

This Committee recently recommended the Department should set out a detailed plan and timetable for getting local audit timeliness back on track. We also recommended the Department explain how it intended to work with the Department for Business, Energy and … Read more This Committee recently recommended the Department should set out a detailed plan and timetable for getting local audit timeliness back on track. We also recommended the Department explain how it intended to work with the Department for Business, Energy and Industrial Strategy to set up the new system leader for local government audit, the Auditing, Reporting and Governance Authority (ARGA), and how it would address the pressing need for effective system leadership while ARGA was being established.43 The Department agreed with our recommendations, however we felt its response lacked detail on specific actions capable of addressing the urgent issues in local audit.44 In December 2021, the Department published a range of measures which aim to support improved audit timeliness and the wider audit market, though some are still being considered following a consultation in summer 2021 while others are subject to further consultation or may require legislation to be passed.45 These measures aim to provide a whole system response and include guidance and training for audit firms, additional funding to support local bodies with the cost of strengthening their financial reporting, measures to improve local authority accounts, reviewing opportunities to reduce some of the accounting and audit requirements and extending the deadline for publishing audited local authority accounts in future years. The Department committed to publishing an update on these measures as part of its response to the summer 2021 consultation.46 37 (LFS0001/ICAEW), pages 3 and 4 38 Committee of Public Accounts, Financial sustainability of local authorities, Fiftieth Report of Session 2017–19, HC 970, 4 July 2018; Committee of Public Accounts, Local government governance and accountability, Ninety- Seventh Report of Session 2017–19, HC 2077, 15 May 2019; Committee of Public Accounts, Local auditor reporting on local government in England, Eleventh Report of Session 2021–22, HC 171, 14 July 2021; Q105 39 Show less

Government Response

The department will update the Committee in Spring 2022 after the outcome of the consultation and BEIS's response on the White Paper have been published and the procurement process has been completed, enabling a more detailed response on the transition to the new arrangements and proposed junctures for further updates.

HM Treasury

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13 Recommendation Deferred

Thirty-Fourth Report - Local Gover…

In 2018, this Committee recommended the Department should review the way local authority audit committees...

In 2018, this Committee recommended the Department should review the way local authority audit committees operate in examining and challenging local risks to financial sustainability.47 In 2019 this Committee highlighted that 27% of external auditors did not agree that audit … Read more

Government Response

The government agrees with the recommendation but defers concrete action, stating it will publish the response to its consultation on the local audit framework and update the Committee in Spring 2022 after the outcome of this consultation and a BEIS White Paper.

HM Treasury

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Government Response AI assessment · 28 of 15 classified

Accepted 12

Acknowledged 10

Deferred 3

Not Addressed 3

Total 15 recs + 14 conclusions

Correspondence 4 letters

21 Apr 2022 Correspondence from Jeremy Pocklington CB, Permanent Secretary, Department for Levelling Up, Housing and Communities, re the committee’s report Local Government Finance System Overview and Challenges, dated 4 April 2022

Parliament page

22 Feb 2022 Correspondence from Jeremy Pocklington CB, Permanent Secretary, Department for Levelling Up, Housing and Communities, re Lessons Learnt, dated 11 February 2022

Parliament page

11 Jan 2022 Correspondence from Rt Hon Michael Gove, Secretary of State, Department for Levelling up, Housing and Communities Minister for Intergovernmental Relations, re Provision Local Government Finance Settlement 2022/23

Parliament page

11 Jan 2022 Correspondence from Catherine Frances Director General, Local Government, Strategy & Analysis Department for Levelling Up, Housing and Communities, re Local Government Finance System Overview and challenges, dated 10 December 2021

Parliament page