Government error overpays councils by £36 million

What has been deemed an ‘historic error’ by the government has seen local councils overpaid a total of £36 million more than they were entitled to.

The error, which relates to the business rates pilot scheme and impacts 27 councils and the Greater London Authority, was discovered after civil servants began to work through the necessary calculations to prepare for the extension of the business rates pilots programme.

Local Government Secretary Sajid Javid has said the councils will not have to pay the money back in light of the ‘extraordinary circumstances’.

The local councils affected were: Greater London Authority; Bolton; Bury; Manchester; Oldham; Rochdale; Salford; Stockport; Tameside; Trafford; Wigan; Halton; Knowsley; Liverpool; Sefton; St Helens; Wirral; Birmingham; Coventry; Dudley; Sandwell; Solihull; Walsall; Wolverhampton; Bath and North East Somerset; Bristol; South Gloucestershire; and Cornwall.

Andrew Gwynn, Labour’s Shadow Communities and Local Government Secretary, said: “This is a complete and utter shambles. There is little wonder that Tory Councils are going bust, when the Secretary of State gets his maths wrong twice. After eight years of cuts, councils are facing unprecedented pressures to balance their books – this task has been made even harder by a Government that has no long-term strategy and no grasp on the figures. 27 authorities will now receive fewer funds than they budgeted for. Sajid Javid needs to explain how this mistake was allowed to happen, and what checks will be put in place to prevent even more errors.”