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Finance settlement delay is no way to run a business and it's no way to run a country

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LGC’s essential daily briefing.

Chief executives, section 151 officers, leaders and anyone else with a vague interest in local government finance: stand at ease, soldiers.

Just as everyone was limbering up their fingers, putting new batteries in calculators and firing up spreadsheets in advance of tomorrow’s anticipated publication of the provisional local government finance settlement, housing and communities secretary James Brokenshire dropped a bombshell. This arrived this afternoon through the medium of a written ministerial statement in which the minister announced the eagerly-anticipated annual event would be delayed until after next Tuesday’s vote on the Brexit deal.

Exactly when the finance settlement will be delivered is not yet known. All Mr Brokenshire said is the finance settlement will be published “after this protected period, by way of an oral statement.”

What will we all do now? What we’ve always done in December during this decade, I guess: twiddle our thumbs and wait for ministers to appear bearing ‘gifts’, like wise men travelling across the desert carrying gold, frankincense and myrrh (only they very rarely bring much gold).

Just two settlements have been delivered in November since 2008, and they were in 2008 and 2009. Settlements since then have been delivered between 8 December (the date it arrived in 2012-13) and 19 December (the date of the 2013-14 and 2018-19 settlements).

The late delivery of some recent finance settlements has been blamed on chancellors delivering their Budgets late.

However, a review by former Treasury director general Andrew Hudson, published in October, noted the task of responding to finance settlements “has been made more challenging, both for the department and for local authorities, because announcements have been made at an increasingly late stage in the annual cycle”.

Mr Hudson also warned: “The later policy decisions are taken, the greater the risk that there will be difficulties in implementing changes.”

While the late delivery of the finance settlement impacts on councils, it also impacts on the ministry’s workforce too.

“The combination of complexity [with business rates] and a tight timetable has raised the risks for the department,” Mr Hudson’s report said. “These risks include later delivery of the figures, and making an overpayment or underpayment to local authorities, with knock-on consequences for service delivery, and for reputational risk to the department.”

To add weight to that argument Mr Hudson’s review was instigated by former housing and communities secretary Sajid Javid after some councils involved in business rates pilots were overpayed by a combined total of £36m last year.

Responding to the damning report, local government minister Rishi Sunak confirmed 6 December as the date on which the latest settlement would be announced. Future ones are to be delivered on or around the 5 December.

At the time Mr Sunak said: “We recognise taking a more planned approach towards the provisional local government finance settlement in future will be fundamental to ensuring local authorities are given more certainty, and the time and space to consider their financial positions for the coming year.”

So fundamental that the government has now decided a “meaningful vote” (or should that be meaningless?) on Brexit takes precedence over telling councils – the institutions which will be tasked with dealing with frontline fallout of Brexit – exactly how little funding they will be getting next year.

This is yet another example of how local government is at the mercy of central government. It is also another argument as to why there should be more widespread, and more meaningful, devolution to all parts of the country – especially over finances.

The government continues to lurch from crisis to crisis. Any major domestic policy decisions remain on the backburner. The country is at a complete standstill.

This is no way to run a business. This is no way to run a country.

By David Paine, acting news editor

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