The government’s definition of financial sustainability among councils is whether statutory services can be delivered locally, the Ministry of Housing, Communities & Local Government’s permanent secretary has said.
Melanie Dawes also said the government does not consider any other councils will issue a section 114 notice in the near future.
Appearing before the Commons’ public accounts committee yesterday Ms Dawes said her department’s “primary focus” is to ensure there are enough resources to enable councils to deliver statutory services.
She said: “Local government is sustainable if the amount of resources available to it can deliver the statutory services which it is required to do. That is what parliament has laid out and that is our primary focus.”
When asked to define the baseline for what is expected of statutory services however, Ms Dawes could not point to a single metric. She said the baseline was found on an on-going basis through a “very detailed engagement” with ministers.
“We don’t have a sense of some metric or threshold over which the sector either is or isn’t [sustainable]. It is a much more nuanced and broader judgement than that,” she said.
However, committee member Gareth Snell (Lab) said the use of the word ‘statutory’ is “misleading” without a proper definition as he said departmental budgets can be cut beyond the point they are considered viable and still be defined statutory.
“You could have an authority that is currently doing a weekly recycling collection that then moves to a collection once every five weeks. [That is] still provisional as statutory service, still meeting the criteria,” Mr Snell said.
Part of the issue, Ms Dawes added, was that the government had decided to end comprehensive performance assessments in 2015, meaning it is “no longer the approach of this government” to publish information on local government services in one place.
The government does still collate this information in one place but chooses to only publish it internally “for the purpose of advising our ministers”, Ms Dawes said.
Alex Skinner, MHCLG director of local government finance, told the committee that the main monitor used to determine a council’s resilience was defined by a simple formula, in combination with a number of “different variants” and inputs. This main formula is devised by dividing a council’s spending on adult social care, children’s services and “debt servicing” by its non-ringfenced reserves.
The government is also “working closely” with the Chartered Institute of Public Finance & Accountancy and the Local Government Association to define the sustainability of individual councils, Mr Skinner said. This definition is based on “lots of inputs” which require a “professional judgement rather than an arithmetic one”, he said.