Local Government: Insolvency
The question
To ask the Secretary of State for Housing, Communities and Local Government, what steps her Department is taking to intervene where councils have issued a section 114 notice.
Answered by Jim McMahon
This Government recognises that council funding has been under pressure since 2010, and we understand that improving how local government is funded is crucial to enabling councils to deliver for local residents. We will provide councils with more stability and certainty through moving towards multi-year funding settlements and by ending wasteful competitive bidding pots. This will ensure councils can plan their finances for the future properly, delivering better value for money for taxpayers.
Councils are responsible for their own finances, and for setting a balanced budget in line with their statutory duties. However, any council that has unmanageable pressures should approach the Government in the first instance.
We have recently confirmed that we will have a framework in place to support those in the most difficult positions. This will be a collaborative process, and for example we recently confirmed our intention not to replicate the punitive premium on borrowing for councils needing support which existed under the previous government's framework.
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