LONDON, 21 February 2024 — The scale of the local government funding crisis has been laid bare this week, as evidence submitted to the Housing, Communities and Local Government (HCLG) Committee inquiry reveals the current system is fundamentally broken.

The evidence was published just hours before the government announced the list of 30 councils due to receive emergency financial support.

Responding to the evidence and the announcement, Philip Glanville, Director of Advocacy and Engagement at UK100, says:

"For too long local leaders have been desperately trying to keep their heads above water, fighting against an ever more suffocating stream of short-term, stop-start funding. The evidence submitted to the HCLG committee inquiry reveals just how stark the struggle has been, with individual councils managing hundreds of competitive funding pots, each with their own strict requirements. This bureaucratic burden is preventing councils from delivering critical climate action in their communities."

"While the government's promise to end this dysfunctional system and deliver multi-year settlements from 2026 is welcome, with a record number of councils now seeking exceptional financial support, we need to see this promise being made good and these reforms implemented urgently. The current system is wasting precious resources that could be better spent on delivery."

In UK100 member Norfolk County Council's evidence to the inquiry, the authority highlighted how:

"The climate of restricted funding and ever increasing pressures afford many councils very little room for manoeuvre, and leads to shorter-term decision making in order to balance a budget; often at the expense of being able to deliver sustainable longer strategies – for example in the lack of adequate funding for preventative strategies, which are not statutory but could potentially deliver better outcomes in the longer term.

The current system is also piecemeal, with last-minute grants being given (or indeed taken away, as was the case with Rural Services Delivery Grant this year – see below) to fill significant gaps in local authority budgets identified between the provisional and final local government finance settlement. This approach causes authorities to have to make decisions with very little time to implement any new ideas."

Meanwhile, UK100 member Vale of White Horse District Council told the committee:

"For several years, councils have received single-year funding settlements from the Government, in a shift away from the multi-year settlements that preceded them. This has hindered long-term financial planning, as councils have not had certainty around funding allocations for future years."

Essex County Council, another UK100 member, added:

"Furthermore, the number of grants awarded to local authorities has grown considerably over the last decade, many of which are very specific and relatively low in financial value. For ECC, we are currently in receipt of over 200 different grants, most of which have conditions and strict reporting requirements."

In response to the Autumn Budget in October 2024, UK100 Chief Executive, Christopher Hammond, said:

"The Chancellor has signalled a welcome shift in how government works with local authorities. The promise to end short-term competitive funding pots, which has choked local climate leadership for decades, is significant. Since UK100's founding in 2016, our members have consistently identified competitive funding pots as the single biggest barrier to local climate leadership."

UK100 has called for:

• Immediate reform of local authority funding away from competitive pots towards multi-year settlements
• Long-term certainty on funding to enable strategic planning and delivery
• A statutory climate climate duty for local authorities
• A clear framework for local-national collaboration on climate action