Housing, Communities and Local Government

Following the local government finance settlement on 3 February 2025, the Government confirmed a £5 million grant to support local authorities facing significant increases in special levies from internal drainage boards. This represents a £2 million uplift from the originally announced £3 million, reflecting the Government’s recognition of the continued financial pressures on local authorities affected by these special levies. Services provided by internal drainage boards are energy-intensive and have been particularly impacted by rising energy costs and adverse weather conditions over the past three years.

Today I am confirming the allocation of this funding to the 18 local authorities most severely affected. Councils and internal drainage boards are encouraged to continue to work together to deliver services efficiently and to ensure good value for money for the public.

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Local audit is the bedrock of local accountability and transparency, and of trust and confidence in councils to spend taxpayer money wisely. But 14 years of neglect took the system to breaking point and damaged a key part of our early warning system over local government finances at the time we need it the most. We are determined to rebuild the foundations of local government so that it is fit, legal and decent. The Government have taken swift and decisive action to clear the backlog of unaudited local authority accounts in England and put the local audit system on a more sustainable footing. This has included setting a series of statutory backstop deadlines for the publication of audited accounts. These proposals were enacted via legislation in autumn 2024, and two backstop deadlines have now passed. This failure of the system has resulted in poor value for money and additional costs, with some £49 million of grant committed to support bodies with the cost of building back assurance in 2024-25 and 2025-26. https://www.gov.uk/government/news/overhaul-of-local-audit-will-restore-trust-in-broken-system

This statement updates on the outcomes of the second backstop on 28 February 2025, confirms publication of the non-compliance list on gov.uk, gives details of the support available to bodies affected by the backstop measures, and updates on the Government’s longer-term plans for reform of the local audit system.

Local bodies, unless exempt, were required to publish their audited accounts for financial year 2023-24 by 28 February 2025. Over 92% of bodies have published audited accounts for financial year 2023-24. Just under 50% of bodies published a disclaimed opinion due to the backstop, while 41% published unmodified—clean—opinions. The 13 bodies were exempt from the publication requirements; however, exemptions no longer apply for three of these bodies, and they have now published their audited accounts. Taken together, the publication figures continue to demonstrate a significant improvement in the overall publication of audited accounts, despite the proximity between the two.