Department For Communities And Local Government Annual Report And Accounts 2014 15

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This report assesses fiscal transparency practices in the United Kingdom in relation to the requirements of the IMF’s new Fiscal Transparency Code (FTC). Across all pillars evaluated in the code, the United Kingdom scores very highly when compared with other countries that have undergone an assessment. Of the 48 principles in the FTC, the United Kingdom meets 9 principles at the basic level, 10 principles at the good level, and 23 principles at the advanced level. Fiscal transparency practices are strongest in the area of fiscal reporting and resource revenue management. In four principles, the United Kingdom’s transparency practices do not currently meet basic practice.

Central government grant funding to local authorities is being cut by over a quarter in real terms (£7.6 billion) between 2011 and 2015. The Department for Communities and Local Government is also introducing fundamental changes to the local government finance system with reforms to business rates and council tax benefits, so the pressures on the sector are set to increase. The Department does not properly understand the overall impact on local services that will result from the funding reductions, nor has it modelled how funding changes may adversely affect other areas of the public sector. It must improve its ability to foresee what effects the full package of funding reductions and reforms will have on local authority areas, particularly for those authorities which face higher deprivation levels. Local authorities' statutory duties have stayed broadly the same, and in some areas, such as adult social care, the demand for services is increasing. There is a risk that the worst-affected councils will be unable to meet their statutory obligations, threatening their viability. The Department must clarify its plans to respond if councils become unviable. More information is needed to understand councils' spending and performance. The Department did not make clear how it will monitor councils' ability to cope with funding changes, or the extent to which they are able to do this by increasing efficiency rather than reducing services. Neither has it demonstrated that the information published is sufficient to provide assurance on the value for money with which councils spend their resources.

In 2010, the Government set out a new approach for local economic growth, in the White Paper Local growth: realising every place's potential. This involved the closure of the Regional Development Agencies and their replacement with new local growth organizations and funds, such as Local Enterprise Partnerships and the Regional Growth Fund. Three years on from this initial announcement, the new Local Enterprise Partnerships and Enterprise Zones are taking shape. However, Local Enterprise Partnerships are making progress at different rates. The Growing Places Fund, Enterprise Zones and the Regional Growth Fund have also been slow to create jobs and face a significant challenge to produce the number of jobs expected. The estimate of jobs to be created by Enterprise Zones by 2015 has dropped from 54,000 to between 6,000 and 18,000. There is also no plan to measure outcomes or evaluate performance comparably across the range of different local growth programmes. Departments cannot therefore show value for money across the programme of local growth initiatives or be sure about where to direct their resources. The new local programmes were not established in time to avoid a significant dip in local growth funds and jobs created. Direct central government spending on local economic growth through the initiatives fell from £1,461 million in 2010-11 to £273 million in 2012-13, but will rise to £1,714 million in 2014-15. Central government needs to plan such reorganizations more effectively, to ensure that sufficient capacity is in place both centrally and locally to oversee initiatives and that accountability is clear

Department for Communities and Local Government annual report and Accounts 2010-11 : (for the year ended 31 March 2011)

Print and web pdfs are available at https://www.gov.uk/government/publications Web ISBN=9781474117586