2020-03-15

MHCLG Interview: Generating Income Challenges for Local Authorities

Aileen Murphie, Director for Ministry of Housing, Communities and Local Government (MHCLG) and the National Audit Office  (NAO) discusses the challenges that local authorities face in generating income

What are the key challenges that councils face in raising income generation in the north at the moment?

Text Quote Final
  • Continuing economic challenges especially in areas where growth has been low historically or which have lost major industries. This is both in terms of attracting new investment to the area and engendering growth from within.
  • In different areas of the country, the scale of the challenge varies, given the unbalanced economic performance of different regions in England.

As a representative of local government and the NAO, what are you experiences dealing with
income generation?

  • Auditors will be looking for well thought through and well informed
  • decision making to support sustainable outcomes for local people as
    is set out in the Code of Audit Practice.

What do you think are the main priorities for local authorities when trying to generate income?

  • Being clear about priorities: is the key point regeneration and improved outcomes for local people or is it purely about future yield?
  • Balancing risk and potential outcome. How risky is the investment or venture? Risk appetite and sensitivity analysis are both key and both officers and members need a thorough understanding of both as they consider plans.

 

Despite the Finance Settlement announcement, the money allocated is not enough--Local Authorities still face a funding gap of over £3 billion this year, according to the Local Government Association. Furthermore, the fair funding review and social care green paper are long overdue, and the Revenue Support Grant is still on course to disappear by 2020. Councils are facing a cliff-edge and the onus now lies with them to implement sustainable, innovative and income generating activities which play to the strengths of respective Local Authorities to alleviate medium and long-term financial pressures.