Local Government Finance
The question
To ask the Secretary of State for Housing, Communities and Local Government, if he will (a) confirm how many local council external auditors' annual reports identified serious financial sustainability issues, as well as the number of local authorities considered at serious threat of a Section 114 notice being issued, and (b) what steps he is taking to monitor the impact of central government financial awards to councils not complying with the requirements for statutory spending.
Answered by Alison McGovern
The department engages closely with local authorities, including in relation to any serious concerns raised through the external audit process. The issuing of a Section 114 notice is a local decision for a council’s statutory Section 151 officer and government has no role in the process. The government has been clear that any council that has concerns about its ability to set or maintain a balanced budget should approach the department in the first instance.
The government is delivering fairer funding for local government, targeting money where it is needed most through the first multi-year Settlement in a decade. However, delivering reform will take time, and the government recognises the challenging financial context for local authorities as they continue to deal with the legacy of the previous flawed system. There will continue to be a support framework in place to support councils in the most difficult positions ahead of 2026-27 as councils start the transition to new funding allocations. Details of Exceptional Financial Support were announced on 23 February 2026 and published on GOV.UK.
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