Government offers 7.5 per cent extra funding for England councils to deliver frontline services
The UK Government has announced more than £64 billion in funding to bolster council budgets in England and ensure they can deliver frontline services.
The final local government finance settlement for 2024-25 makes available up to £4.5 billion more for councils in England in 2024-25, an above-inflation increase of 7.5 per cent on the previous year, with £64.7 billion for local government overall.
The package includes the £600 million in extra support to bolster council budgets, including £500 million for social care, announced on 24 January. This support was announced following the consultation on the provisional local government finance settlement.
The additional funding was welcomed by leading local government organisations, including the Local Government Association, County Councils Network and District Councils Network.
The additional funding has been made possible because of the government sticking to the plan and making the right long-term decisions to deliver on our economic priorities of halving inflation, which has already more than halved, growing the economy and reducing debt.
The government is also supporting all councils through the sector-wide Funding Guarantee, ensuring that all councils will see an increase in Core Spending Power of at least four per cent before any local choices on council tax, an increase from the three per cent announced at the provisional settlement.
Councils will be able to increase council tax by up to three per cent without a local referendum, with a further two per cent for those responsible for adult social care services.
The government’s manifesto commits to continuing to protect local taxpayers from excessive council tax increases. Its referendum principles, it states, strike a fair balance and we have been clear local authorities must be mindful when taking any decisions relating to council tax.
The Secretary of State has also confirmed additional council tax flexibilities for some failing councils, reflecting the most serious of circumstances. It has been clarified to each of the councils that in implementing any additional increases, they should take steps to mitigate the impact on those least able to pay.
Michael Gove, Levelling Up Secretary, commented: “Today, I set out the final Local Government Finance Settlement for 2024-25. This makes available up to £64.7 billion for local authorities in England, an increase in Core Spending Power of up to £4.5 billion, or 7.5% in cash terms, on 2023-24.
“This settlement, and the changes we have made to address concerns raised through the consultation, will provide local authorities with the tools to support their local communities, continue to reform their services for the long-term, and to help communities prepare for the future.”
The final local government finance settlement includes a total funding package for councils worth £64.7 billion for the next financial year, an increase of up to £4.5 billion or 7.5 per cent in Core Spending Power compared with 2023-24.
Additionally, the most relatively deprived areas of England will receive 18 per cent more per dwelling in available resource through this settlement than the least deprived areas.
It will also include £1.5 billion in additional funding for social care compared to 2023-24, bringing the total grant funding for social care through this settlement to £8.7 billion.
An extension to the Funding Guarantee to ensure every council sees at least a four per cent increase in Core Spending Power before any council tax decisions locally, will also be included in the final local government finance settlement.
As an effort to return the sector to sustainability in the future, the UK Government is also asking local authorities to develop and share productivity plans, which will be published by July 2024 before the House rises for the summer recess. Plans must be agreed by Council leaders and members and published on local authority websites, together with updates on progress.
The UK Government expects them to cover four main areas, including transformation of services to make better use of resources, and opportunities to take advantage of advances in technology and make better use of data to inform decision making and service design.
It plans to establish a new productivity review panel, made up of sector experts including the Office for Local Government and the Local Government Association.
The UK Government recently released its Spring Budget statement detailing its plans for the upcoming year with a host of measures outlined, including some which promise to impact nursing and the NHS generally. The fiscal plans offered no new funding for social care or for disabled people, leaving many in the sector feeling disappointed.
