The Ministry for Housing, Communities & Local Government has been criticised for failing to bid for additional funding to prepare councils for Brexit, with questions raised about the reasons for the decision.
This comes after Local Government Association chair Lord Porter (Con) conceded defeat over the sector’s ability to directly influence the final Brexit deal.
Ministry’s failure to bid for extra Brexit cash ‘beggars belief’
Departmental allocations from £1.5bn made available by the Treasury this year were announced in last week’s spring statement, but the ministry was not included. The Treasury later confirmed to LGC that the ministry did not receive any funding because it did not submit a bid.
A ministry spokesperson said this was because funding had been “reprioritised” while “efficiencies” had been made to fund Brexit preparations.
Shadow communities secretary Andrew Gwynne tabled an urgent question asking how much of the ministry’s budget had been reallocated to funding for Brexit preparation.
In response Northern Powerhouse minister Jake Berry said on Monday “no funding” had been reallocated, adding the ministry had “secured additional flexibility to retain income in the autumn Budget to deliver our agenda, including EU exit”.
LGC asked the ministry to clarify the nature of this flexibility but had not received a response before going to press.
Mr Gwynne questioned why the ministry, which he said had endured the largest funding cuts of any department since 2010, did not bid. He said it also raised concerns “that the government are not taking seriously their responsibility to protect EU structural funds”.
Rob Whiteman, Chartered Institute of Public Finance & Accountancy chief executive, said transparency over how much money the ministry had set aside would provide “welcome assurance that the department is equipped to deal with the impact of Brexit”.
He added: “A lot is at stake for local public services when it comes to Brexit, so it is vital MHCLG has adequate resources to assess and prepare for the potentially profound impacts and, we must hope, opportunities.”
Adam Lent, director of the New Local Government Network thinktank, said the ministry’s decision “beggars belief”. He said NLGN research had shown 68% of council leaders and chief executives felt they were not receiving adequate engagement from the government to plan for Brexit.
“It seems remarkable MHCLG would forego the chance of extra funding to help the sector prepare for EU withdrawal,” said Mr Lent. “The ministry urgently needs to raise its game on the issue by speaking up for and speaking to councils as part of the Brexit planning process.”
LGA Brexit task and finish group chair Kevin Bentley (Con) told LGC “it would have been nice” if the ministry had bid for further funding but said other issues, such as securing a replacement for EU structural funds, are of greater importance as “although we’ve got an agreement that the current programmes up to 2020 will be funded, beyond that we don’t know”.
On Monday, the government agreed that, once the UK exits the EU, a process will be established to consult local government on matters it would have been consulted on through the EU’s Committee of the Regions.
Speaking to LGC before that decision had been made, Cllr Bentley said: “We need a new formal arrangement so [local government] can negotiate,” he said. “This is a golden opportunity to devolve that decision-making… What we don’t want is a straight transfer from Brussels to Whitehall.”
At an LSE conference on Brexit and local government earlier this month, Local Government Association chair Lord Porter (Con) was asked if the sector can become a “pivotal voice” on the final deal.
Lord Porter said: “We could, but we won’t be – I can guarantee that. Whilst we have the conversations with central government about the prospects, we won’t be part of the final decision-making -process.”
However, he said councils can “apply pressure” to MPs to lobby on their behalf as they have “disproportionately more power than they have ever had in my lifetime” due to the government’s lack of majority.