Exceptional financial support for local authorities

Since 2020, the government has given considerable support to the local government sector to respond to the COVID-19 pandemic. However, as a result of particular local circumstances, a small number of local authorities approached the government for exceptional financial support to help them address financial pressures that the considered unmanageable.

Government therefore agreed to provide additional financial support to these authorities on an exceptional basis, and on the condition that each council was subject to an external assurance review on their financial position (apart from Nottingham City Council and Croydon Council which were both subject to non-statutory external reviews during 2020).

The external assurance reviews were published in 2021 and provided a detailed assessment of each authority’s financial position and financial management, with clear recommendations on where the authority needs to take action to improve. In the case of 3 authorities (Peterborough, Slough and Wirral), the external assurance reviews looked at both their financial position and wider governance arrangements, focusing on the authorities’ ability to deliver a plan for financial sustainability with policies and procedures in place to ensure robust decision making and accountability.

The capitalisation directions published above relate to support for the financial years 2020-21 and 2021-22. A small number of authorities have also requested support in relation to unmanageable pressures in 2022-23. In these cases, the government has agreed support in principle subject to continued progress on their improvement and updates on their financial position during 2022-23. The final amount of support may therefore be subject to change and the government will publish a final outcome in due course.

The government’s approach to the 2021-22 capitalisation directions and to in-principle agreements for 2022-23 reflect the findings and recommendations from relevant external assurance reviews. As indicated below, a small number of authorities who originally requested additional financial support for 2021-22 have since withdrawn their requests where their financial position and pressures have changed. In all cases the government has set a clear expectation that authorities respond effectively to the challenges and recommendations highlighted in the external assurance reviews, and provide regular updates to the government on progress.

Authorities that have requested support for 2020-21, 2021-22 and 2022-23

Authorities that have requested support for 2020-21 and 2021-22

Authorities that have requested support for 2021-22 and 2022-23

Authorities that requested support for 2020-21 only