Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Communities and Local Government, what steps his Department has taken in response to the recommendations and key findings of the National Audit Office's report, Financial sustainability by local authorities 2014, published in November 2014; and what work his Department has carried out on improving its understanding of the financial stability of local authorities.

The National Audit Office report, Financial Sustainability of Local Authorities made four key recommendations.

In line with my rt. hon. Friend, the Secretary of State's (Greg Clark) statement to the House on 17 December, Official Report, Columns 1722-1724, we have noted the criticism of the Public Accounts Committee and the DCLG select committee about previous inclusions of the existing Better Care Fund and the Public Health Grant in councils' spending power. So we will follow their advice, and henceforth report only resources over which councils have discretion.

In relation to transformation projects, the overall local government finance system sets the conditions to achieve value for money through strong pressure to improve outcomes, whilst delivering services more efficiently

We have learnt from previous spending reviews. In preparation for the Spending Review 2015 officials had early and extensive engagement with all departments that rely on local government to deliver services. This enabled the department to build up a clear picture of whether local authorities core funding was sufficient to deliver their statutory services.

The Department monitors the financial stability of local authorities as part of its oversight of local government expenditure. Officials use the detailed data returns that provided by local authorities throughout the year and they gather intelligence through routine interactions with local authorities, representative bodies and other departments. This helps them to anticipate and act on potential problems.