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Five things we learned from Melanie Dawes at the HCLG committee

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A commentary on the permanent secretary’s appearance in front of MPs yesterday afternoon

Councils responsibilities do extend beyond statutory services after all…

Since taking a fair bit of flak for her comments to the Commons public accounts committee in November that a council was sustainable as long as it could provide statutory services, Ms Dawes appears to have refined her position somewhat. “We look at the statutory services but we do also make sure in our assessment we take into account the flexibility councils need to deliver more than statutory services and also to respond to events,” she said.

…which is a good job as they could be asked to do all manner of things in the event of a no-deal Brexit

Ms Dawes declined to give headline writers an easy time by agreeing with MPs that a no-deal Brexit would constitute a civil emergency. Nevertheless, the guidance on how councils should handle civil emergencies had just been updated and “those structures” should be mobilised in a no-deal scenario, she said. Councils could be asked to take on additional responsibilities by other government departments, such as “inspections or work in ports” Ms Dawes said.

More details on how EU funding to local areas will be replaced will be made available “soon”

Ms Dawes told MPs the reason there had been no detailed proposals for the operation of the promised UK Shared Prosperity Fund was because the approach to the fund would be different depending on the terms under which the UK leaves the EU. In a no-deal scenario the government could take advantage of new freedoms sooner, she said. In the meantime, the ministry has been engaging with local enterprise partnerships and the devolved administrations and hopes to publish more formal proposals soon.

The ministry is concerned about the commercial property investments of just “two or three” councils.

Ms Dawes declined to name names but, as in any conversation on this topic at the moment, it never takes long for Spelthorne BC to come up and so it was at the committee. Asked whether the council was “on your radar”, Ms Dawes said they “certainly have very high borrowing rates”. 

The council, which has income from traditional sources of council tax, business rates and government grant of just over £10m in 2019-20, has borrowed more than £1bn to invest in property. Among its 12 purchases is the BP office campus in its borough which cost £358m. Property investment constitutes one big egg in one very local basket. In general the ministry judges most councils are behaving responsibly.

The ministry now has something called a Local Authority Sustainability Tool.

It is not clear whether the tool is a new thing, or a more coherent way of explaining how the ministry monitors council resilience in the wake of criticism from the National Audit Office of its monitoring arrangements. At the PAC in November MPs were told the ministry used a simple formula of dividing a council’s spending on adult social care, children’s services and “debt servicing” by its non-ringfenced reserves in combination with a number of “different variants” and inputs to determine a council’s financial resilience. Yesterday, Ms Dawes said the ministry had a Local Authority Sustainability Tool that used eight metrics to produce heat maps and was not dissimilar to the Chartered Institute of Public Finance & Accountancy’s resilience index. Like the latter the results will remain firmly under wraps, and will not be shared with MPs or anyone else.

Sarah Calkin, deputy editor

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