Fragmented funding ‘adds up to poor VFM’

English councils received at least 448 individual government grants between 2015/16 to 2018/19 in an increasingly “fragmented and reactive” use of public funding, a new LGA study reveals.

For the first time, analysis commissioned by the LGA has mapped out the grants issued by central government to councils, combined authorities, and fire and rescue authorities in England between 2015/16 to 2018/19.

This found that in any given year, councils received around 250 grants, compared with around 61 main grants paid to local authorities in 2013/14. More than a third were discontinued from one year to the next – creating negative impacts on staff retention, long-term strategic planning, and joint commissioning.

Almost a quarter of grants issued each year were worth less than £1 million, equating to less than 0.25 per cent of the budget for a typical metropolitan district or London borough. 

Around a third of the grants were awarded on a competitive basis, with councils often spending more on preparing bids at short notice than they stand to receive back.

The LGA is calling for the Government to end this fragmented and reactive way of funding vital local services and tackling demand pressures. Instead, helpful additional funding for councils should be delivered through primary sources of local government funding rather than individual programmes.

Cllr Richard Watts, Chair of the LGA’s Resources Board, said: “The use of short-term grants is increasingly representing poor value for money. Councils need certainty to plan local services without the added burden of navigating a complex and fragmented funding landscape.

“If fragmentation and ringfencing of grants is reduced, councils can provide much better value for the same amount of funding and provide services that prevent crises from happening, rather than simply managing them when it is too late.

“The Government needs to radically re-think public spending in a way that is fit for the future and empowers councils to deliver on the ambition for our communities that central and local government share.”

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