The publication of the final local government finance settlement has been delayed due to Brexit, LGC understands, prompting concern over the impact the delay will have on councils’ budget setting processes.
Communities secretary Sajid Javid said in a written ministerial statement, published today, that he would “publish the final settlement later this month”.
Correspondence sent to councils today by the Local Government Association says “the date for the parliamentary debate on the 2017-18 final local government finance settlement has been confirmed as Wednesday 22 February”.
Sean Nolan, director of local government at the Chartered Institute of Public Finance & Accountancy, told LGC it was “highly unusual for it [the final financial settlement] to be so delayed”.
LGC understands the Department for Communities & Local Government has blamed the delay on a lack of parliamentary time due to Brexit. This week has seen the European Union (Notification of Withdrawal) Bill debated in the Commons on Monday, Tuesday and Wednesday. From tomorrow parliament will be in recess until 20 February.
Geoff Winterbottom, principal research officer for the Special Interest Group of Metropolitan Authorities, told LGC “those two things in conjunction do give you pause for thought”.
He said the delay was “causing a lot of issues” for councils concerned about setting “invalid” budgets based on provisional settlement figures which could change.
“The general view of our legal officers is that…if anything does happen that throws the cat amongst the pigeons it will be beholden on government to sort it out as much as it would be for local authorities,” said Mr Winterbottom.
He gave the example that while Mr Javid has set out council tax referendum principles for 2017-18, those have not yet been formally approved.
“In an extreme legal sense there is the potential issue that parliamentary processes might not validate what the secretary of state has said about referendum limits, so there’s concern about that,” said Mr Winterbottom.
Lee Colyer, director of finance and corporate services at Tunbridge Wells BC, told LGC the delay “creates huge uncertainty that the budget we put together is sound and deliverable” and puts resourcing pressure on finance teams so close to the next financial year.
He added the delay was “almost contemptuous” of councils’ processes as well as the residents and community groups who turn up to annual full council meetings to make representations about the budget.
Mr Colyer said: “It’s very difficult to protect them from the shambolic way in which local government funding is determined, allocated and notified. It’s astounding given the effort we go to to consult the public on any changes…and yet all of that is held in abeyance depending on whether central government wants to make last minute changes to our allocations or other forms of funding, such as the new homes bonus.”
Andrew Burns, director of finance and resources at Staffordshire CC, understood the delay had been caused by Brexit.
He said most councils should be able to cope with the delay providing there are only minor changes to the provisional settlement.
“It’s an irritation that we have got to set a budget without complete certainty but it’s not anything we’re not used to,” said Mr Burns.
Another finance director, who did not wish to be named, agreed that getting confirmation of the final settlement six weeks before the start of the new financial year was “unprecdented” and would be difficult to manage.
“Most councils will have their meeting in that week [commencing 20 Feb],” he said. “It would mean tabling a late paper or [if it has not been published] asking members to vote on provisional figures.”
The DCLG declined to comment.