The government must “spell out” what it is doing to help councils deal with current financial uncertainty, the chair of the Levelling Up, Housing and Communities (LUHC) committee has said.
Following the LUHC’s evidence session with levelling up secretary Michael Gove last week, Clive Betts has written a letter to the secretary of state pressing for further detail on the government’s approach to the financial challenges facing authorities in England.
In the wake of chancellor Jeremy Hunt’s Autumn Statement, the Office for Budget Responsibility (OBR) forecasted that “non-protected” governmental departments could receive real-terms funding cuts of 2.3% from 2025/26.
In his letter, the LUHC committee’s chair asked Gove to confirm what advice and support the Department for Levelling Up, Housing and Communities (DLUHC) is providing to councils to help them plan for funding cuts on the scale that the OBR has forecast.
“The secretary of state was unwilling to comment directly on the future financial implications for local authorities of the announcements made at the Autumn Statement.
“Many councils will need to confront the implications of forecasted annual cuts in unprotected spending now when setting their medium-term financial plans.
“The secretary of state should spell out what his department is doing now to help councils plan for potential funding cuts and what assistance they are providing to ensure councils can deliver their services,” Betts said.
At the evidence session, Gove also stated that DLUHC maintains a watchlist of local authorities that are facing significant financial pressures, however he did not disclose what councils were on the list or how many.
In his letter, Betts questioned: “We understand your concerns about naming the local authorities currently included on the list, but please can you provide an overview of the type of financial challenges the councils involved are facing?”
He added that it would be particularly helpful to understand whether these councils are facing particular one-off issues or general systemic challenges.
Betts’ letter also asked Gove for additional information on the real terms spending power of local authorities. The LUHC committee’s chair also followed up on the secretary of state’s commitments at the evidence session to provide additional information on a number of areas, including the impact of Local Housing Allowance being frozen again in 2025 and the number of unaccompanied asylum-seeking children entering the care system and what role this has played in increased demand for children’s services.
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