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Martin Reeves, Solace spokesperson for Local Government Finance, said: “We welcome this important and timely report from the Public Accounts Committee, and agree with its conclusions that the Government’s over optimism about local government’s financial resilience against the pressures of the pandemic has led to reductions in local services. We also agree that there have been serious shortcomings in the Government’s understanding of the risks and pressures facing the sector during its response to Covid-19.

“It is therefore encouraging to see the Committee back our calls for a sustainable multi-year financial settlement in order to address the longstanding structural issues in local government finance. The alternative – where a lack of clarity and timeliness from Government creates additional uncertainty for local authorities, at a time when they are already under immense pressure from the pandemic, including on their capacity to deliver – is unacceptable and counterproductive.

“We acknowledge that engagement with MHCLG has improved significantly in recent years, and the Department should be commended for the increased confidence this has brought within the sector. We look forward to working constructively with MHCLG colleagues over the coming months to help produce workable, creative solutions to these incredibly difficult funding challenges.

“Unfortunately, this cannot be said for all parts of Government. In particular, there is a need for the Treasury to properly engage with local government on the challenges we face, and provide the financial certainty we need to deliver the best possible services and enable our communities to thrive.

“While Whitehall operates in silos, the cumulative impact of centrally made decisions on our places goes unrecognised. A perpetual focus on short term savings might appear to create efficiency, but simply leads to a system that is running on empty, leaving no spare capacity for any increased demand on our services, as we have seen over the course of the pandemic.

“The Committee’s recommendations that the Department and Treasury work to capture the most urgent learnings from the pandemic; enhance their understanding of the operational realities that many authorities face; and ultimately ensure local government is given a truly stable financial footing, all provide a constructive way forward for Government to work with our sector, and Solace stands ready to support.”