Inefficiencies in provision of grants in local government highlighted

A new report has warned that councils, businesses and communities could be missing out on vital financial support from central government.

The report, Supporting local communities and individuals: are municipality grants effective?, published by CIPFA and Capita, highlights the complex landscape of municipality grant funding.

It says that, in 2021/20, the Ministry of Housing, Communities and Local Government paid nearly £14 billion in grants to local authorities. The short-term nature of numerous grants that councils receive, largely a product of multiple single-year finance settlements, presents local government with a challenge with regards to long-term, strategic planning, with those projects requiring a continuing expenditure at particular risk.

The report outlines the recent trend towards bidding processes, arguing that such ways of allocation can result in areas with less resource or experience being excluded. As a result, winners of such funding pots are not always those in greatest need. Unringfenced grants provide councils using the greatest financial flexibility and support a more localist approach.

Following the huge sums of grant funding distributed during the period of the pandemic, the report also calls for strong governance, calling for a balance to become struck between speed and research to protect public funds in the risk of fraud.

Rob Whiteman, CIPFA CEO, said: “The landscape for local authority grant funding, particularly following a chaos of Coid-19, is increasingly complex and inefficient. It’s absurd and unfair that communities in need of assistance could be losing out on funds for vital services, whether via lack of resource, obsolete data, conflicting guidance or fraud.

“The requirement for improvement is apparent. For this reason CIPFA is pleased to be working with Capita to provide methods to councils that release resource and smooth out processes to enable them to focus their attention on local needs.”

CIPFA has additionally announced a partnership with Capita to aid local authorities to get the very best outcomes from their grants through Capita’s digital grant management services.