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Publication Devolution Growth and productivity Machinery of government Public finances 26 February, 2025

Evidence submission: HCLG inquiry on "The Funding and Sustainability of Local Government Finance"

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As Government seeks to reform local government finance, the Committee for Housing, Communities and Local Government launched an inquiry to consider whether the local government finance system is fit for purpose and assess how it can meet the needs of local authorities and service users. The inquiry seeks to explore how much control local authorities have over their own finances and whether this is enough to achieve financial sustainability.

Reform’s Reimagining the Local State programme has directly considered many of the key questions raised by the Committee in this inquiry and published two reports on this topic:

The submission details the problems and potential solutions in answer to five questions:

  • Is the local government finance system fit for purpose?
  • Where are the most significant funding pressures in local government, and how does the finance system address them?
  • Does the current statutory regime for identifying and responding to financial distress in local authorities support local authorities to get out of financial distress?
  • How much control do local authorities have over the levels of funding they receive and returns on commercial investments?
  • How well does the Government understand the consequences of funding and mandatory service decisions?