Funding local growth in England
Think tank: Institute for Government
Author(s): Thomas Pope; Rebecca McKee
May 31, 2024
This report from UK think tank the Institute for Government sets out how the next government can simplify the funding landscape for all local and combined authorities.
Central government’s over-reliance on competitive bidding to fund local and combined authorities is not working for anyone and inhibits local growth.
This report sets out how the next government can simplify the funding landscape for all local and combined authorities, not just the most developed mayoralties.
It identifies three features of the current funding landscape which undermine the government’s attempts to use funding to meet its levelling up and other objectives.
A huge number of different funds available to local leaders, with tight ringfences determining how the money can be spent.
The Local Government Association found 448 unique grants between 2015/16 and 2018/19 from central to local government.
Funds are often short term, with many lasting only one year. Almost half of the grants issued in 2022/23 were due to expire at the end of the year (48%) – providing no scope for stability or longer-term planning.
A quarter of funding streams (covering 8% of total local government funding) is awarded through competitive bidding.
This is a huge resource burden for local authorities, with bids often costing £20,000 to £30,000.
