12
Numerous ring-fenced grants create administrative burden for local authorities, prompting consolidation efforts.
Conclusion
Outside of the finance settlement, local authorities can receive hundreds of different local grants from several government departments. While there is no official count, Councillor Pete Marland suggested that there are around 300 funding streams coming from central government to support specific services or policy objectives.25 These are often small, and ring fenced for a specific purpose, but the administrative work involved for local authorities 19 Qq 97, 102 20 Q 103 21 C&AG’s Report, para 1.10 22 LGFS0001 23 LGFS0017 24 Qq 43, 56; C&AG’s Report, para 3.15 25 Q 21 12 to review and account for the spending can be considerable.26 MHCLG acknowledged that it had previously not had the ‘best grip’ on how many grants there were outside the local government settlement.27 However, it stated that it was working with HM Treasury to consolidate the individual stream of grants that local authorities both receive and report on, believing consolidation could achieve greater value for money by giving local authorities greater flexibilities to meet need.28 MHCLG told us that the need to reduce funding streams to local government to achieve value for money was well understood by the permanent secretaries of other departments.29 We asked HM Treasury to give assurance that reducing the number of funding streams was one of its top priorities. HM Treasury told us that it could “absolutely give that assurance”, and that it was using the upcoming spending review to consolidate grants across the whole of government, with MHCLG adding that between five and 10 grants had already been consolidated as part of the 2025–26 finance settlement.30
Government Response
A response document is linked to this report, dated 18 September 2025. Response attribution to this conclusion has not been verified. Read the response document.
Source
Committee
Public Accounts Committee
Report
31st Report - Local Government Financial Sustainability
18 Jun 2025
HC 647
Addressee Bodies
HM Treasury
Timeline
Recommendation age
1.2 yr
Report published
18 Jun 2025