Councils were overpaid by £36m due to ‘error’

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Sajid JavidImage copyright Getty Images
Image caption Sajid Javid will not seek to recover the money

Local councils in England were paid a total of £36m more than they were entitled to due to an “historic error” by the government.

Local government secretary Sajid Javid has said the councils will not have to pay the money back.

The error relates to the business rates pilot scheme and impacts 27 councils and the Greater London Authority.

Labour’s local government spokesman Andrew Gwynne described the incident as an “utter shambles”.

The overpayment was discovered after civil servants began to work through the necessary calculations to prepare for the extension of the business rates pilots programme, which allows local authorities to keep 100% of locally-collected business rates, in 2018-19.

In a written Commons statement, Mr Javid said he had instructed officials not to seek to recover the money in light of the “extraordinary circumstance”.

The mistake follows an error in the draft local government finance settlement published before Christmas, which led to accusations from Labour that Mr Javid had “misled Parliament”.

Mr Gwynne called on Mr Javid to explain what checks had been put in place to prevent further errors, adding: “There is little wonder that Tory councils are going bust, when Sajid Javid gets his maths wrong twice.”

The local councils affected were:

In London

Greater London Authority

Greater Manchester

Bolton

Bury

Manchester

Oldham

Rochdale

Salford

Stockport

Tameside

Trafford

Wigan

Liverpool City Region

Halton

Knowsley

Liverpool

Sefton

St Helens

Wirral

West Midlands

Birmingham

Coventry

Dudley

Sandwell

Solihull

Walsall

Wolverhampton

West Of England

Bath and North East Somerset

Bristol

South Gloucestershire

Cornwall

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