A new report, ‘Local government grants: how effectively do they support communities?’, published today by CIPFA in partnership with Capita plc (Capita), highlights the complex landscape of local government grant funding, and warns that councils, businesses and communities could be losing out on vital financial support from central government.
In 2019/20, the Ministry of Housing, Communities and Local Government (MHCLG) paid out nearly £14bn in grants to local authorities. The short-term nature of many grants that councils receive, largely a product of multiple single-year finance settlements, presents local government with a challenge when it comes to long-term, strategic planning, with those projects requiring an ongoing financial commitment at particular risk.
The report outlines the recent trend towards bidding processes, arguing that such methods of allocation can result in areas with less resource or experience being excluded. As a result, winners of such funding pots are not always those in greatest need. Unringfenced grants provide councils with the greatest financial flexibility and support a more localist approach.
Following the huge sums of grant funding distributed over the course of the pandemic, the report also calls for strong governance, calling for a balance to be struck between speed and due diligence to protect public funds from the risk of fraud.
Alongside today’s report, CIPFA also announced a partnership with Capita to support local authorities in getting the best outcomes from their grants through Capita’s digital grant management services.
CIPFA CEO Rob Whiteman said:
“The landscape for local authority grant funding, particularly following the chaos of COVID-19, is increasingly complex and inefficient. It’s absurd and unfair that communities in need could be losing out on funds for vital services, whether via lack of resource, obsolete data, conflicting guidance or fraud.
“The need for improvement is clear. This is why CIPFA is pleased to be working with Capita to provide solutions to councils that free up resource and smooth out processes to enable them to focus their attention on local needs.”
Capita’s end-to-end grant management platform, GrantIS™, reduces costs and improves efficiency for authorities managing grant schemes, as well as helping to identify and prevent fraud.
Markus J Becker, Digital Growth Director, Capita, said:
“As we rebuild following the COVID-19 pandemic, there is a significant opportunity for local authorities to improve the way they disburse public funds. This is why we have partnered with CIPFA to help councils to disburse grants more efficiently.
“We know that the digitisation and automation of these processes reduce fraud and save money on administration, which can instead be invested in creating better outcomes for communities.”
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