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Local Government Finance 2025-12-17
17 December 2025
Lead MP
The Minister for Local Government and Homelessness
Debate Type
Ministerial Statement
Tags
EconomyTaxationHousing
Other Contributors: 48
At a Glance
The Minister for Local Government and Homelessness raised concerns about local government finance 2025-12-17 in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Government Statement
Today, the minister announced a new local government finance settlement that includes over £5 billion of new grant funding for local services over a multi-year period. The settlement breaks the link between funding and deprivation, aiming to address the economic and social costs of poverty and inequality. It introduces a recovery grant guarantee providing an above-real-terms increase to social care authorities, and simplifies 36 funding streams worth more than £56 billion. By 2028-29, core spending power for local government is set to reach over £84.6 billion, representing a significant cash-terms increase compared with 2025-26. The settlement also addresses issues in children's social care, special educational needs and disabilities (SEND) provision, and homelessness prevention strategies. However, the minister acknowledges that past funding systems left local government in chaos, necessitating national change to empower councils.
David Simmonds
Con
Ruislip, Northwood and Pinner
Question
The MP asked about the impact of rising taxes on local councils dealing with economic pressures. He criticised the settlement for punishing efficiency, introducing new hospitality taxes, and implementing a homes tax that costs the Treasury money.
Florence Eshalomi MP
Lab/Co-op
Vauxhall and Camberwell Green
Question
The Minister mentioned that the Government will be looking at the council tax freeze in some areas, and at lifting referendum principles. Can the Minister provide a clear timeline for when councils will receive certainty on the SEND deficit?
Minister reply
Multi-year settlements allow councils to plan properly and undertake commissioning activities over a longer period of time. Local authorities will not be expected to fund costs from general funds once the statutory override ends in 2028. We will have more to say on that throughout this settlement process.
Guildford
Question
Can the Minister provide a clear timeline for when councils will receive certainty on the SEND deficit?
Minister reply
Local authorities will not be expected to fund costs from general funds once the statutory override ends in 2028. We are building a national care service, backed by about £4.5 billion of additional funding for adult social care in 2028-29, compared with 2025-26.
Helen Hayes MP
Lab
Dulwich and West Norwood
Question
When does the Minister expect to be able to set out more detail on how councils will be supported to reduce the need for temporary accommodation and to bring the costs down?
Minister reply
Last week I set out our strategy to counteract that terrible phenomenon and I will talk in detail to councils in the weeks and months to come to do exactly as she asks.
Simon Hoare MP
Con
North Dorset
Question
What this proposed settlement will do specifically to address higher costs of delivering services in rural areas?
Minister reply
We are including a journey times adjustment in our assessment of cost for all services. We are also increasing the cap in the home-to-school transport formula from 20 miles to 50 miles, and including a remoteness adjustment in the adult social care formula.
Greg Smith
Con
Mid Buckinghamshire
Question
The Minister said she did not want to look the other way, but rural communities are being overlooked. Given that rurality has been removed from formula decisions except for adult social care, can she explain how areas like Buckinghamshire will be properly funded?
Minister reply
We have recognised extra cost pressures in certain areas and included them in our data analysis. The new deprivation statistics provide a more detailed picture of poverty wherever it exists, whether in rural or urban areas.
Clive Betts
Lab
Sheffield South East
Question
I welcome the Minister’s comments about tackling deprivation but challenge her on council tax reform and long-term changes to social care funding. Can she start conversations across parties for a long-term settlement?
Minister reply
The Government are committed to fixing social care for the long term, as highlighted in Baroness Casey's report which will drive us towards that vision.
Tim Farron
LD
Westmorland and Lonsdale
Question
Given Westmorland and Furness’ unique situation as England’s most rural council with high social care needs, can the Minister meet me to discuss a solution for our 13% budget cut over three years?
Minister reply
I am willing to meet the hon. Gentleman and any colleagues he wishes to bring, to go through the numbers in detail.
Andrew Cooper
Lab
Mid Cheshire
Question
Can the Minister provide more information on what this settlement means for Northwich, Winsford and Middlewich, and when councils will get certainty about the future of the statutory override?
Minister reply
We are committed to properly funding authorities in Cheshire to support essential services. Significant increases in spending power have been allocated to those authorities.
Rebecca Smith
Con
South West Devon
Question
Can the Minister reassure constituents that prudence and good decision-making by local councils will not be penalised under local government reorganisation?
Minister reply
We value prudent decisions made by local authorities, and we aim to ensure these efforts are recognised during the reorganisation process.
Andrew Lewin
Lab
Welwyn Hatfield
Question
Welwyn Hatfield will benefit from a £9 million increase. Will the Minister guarantee that need after housing costs will continue to be a key part of assessing deprivation?
Minister reply
We are committed to identifying poverty and deprivation based on evidence, including factors such as housing costs.
Ian Roome
LD
North Devon
Question
Could the Minister describe what percentage the remoteness element will represent for places like Devon and North Devon district council?
Minister reply
I will write to the hon. Gentleman with specific details about his area, including how the remoteness formula affects funding.
Preet Kaur Gill
Lab/Co-op
Birmingham Edgbaston
Question
Does the Minister agree that only Labour can be trusted to invest in Birmingham given our eight-year fight for fair funding?
Minister reply
The Government are committed to investing in Birmingham through today’s fair funding settlement, including £160 million of Pride in Place funding.
Ellie Chowns
Green
North Herefordshire
Question
Welcomes the shift to multi-year funding settlements but expresses concern about continued funding reductions for North Herefordshire and Herefordshire council, urging recognition of additional costs due to rurality.
Minister reply
Acknowledges concerns over rural funding and commits to engaging with all councils, including those in rural areas like Herefordshire.
Imran Hussain
Lab
Bradford East
Question
Questions whether the new formula will ensure Bradford, one of the most deprived areas, receives its fair share.
Minister reply
Confirms commitment to addressing deprivation in places like Bradford and emphasises the importance of supporting young people there.
Bradley Thomas
Con
Bromsgrove
Question
Asks if Labour is involved with Reform to increase council tax by 10%, as reported.
Minister reply
Denies being in cahoots with Reform and offers to respond formally to any concerns raised.
Andy Slaughter
Lab
Hammersmith and Chiswick
Question
Invites the Minister to visit Hammersmith and Fulham council, which has made significant savings despite facing substantial funding cuts under the Tories.
Minister reply
Expresses willingness to visit Hammersmith and Fulham council.
Torbay
Question
Welcomes Torbay council's achievement of a 'good' rating from CQC but raises concerns about funding losses for adult social care.
Minister reply
Acknowledges the issue and offers to discuss specific figures with the MP.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
Question
Welcomes the link between local government funding and deprivation, asking how it will benefit children in Luton.
Minister reply
Commits to significant investment in Luton to support its economic growth and ensure children thrive.
Blake Stephenson
Con
Mid Bedfordshire
Question
Questions the Minister's confidence that rural deprivation will be adequately addressed.
Minister reply
Confirms commitment to addressing rural deprivation through improved data analysis and meeting with local leaders.
Mike Kane
Lab
Wythenshawe and Sale East
Question
Asks for a commitment to work on anomalies in Trafford council's funding formula.
Minister reply
Commits to working closely with colleagues, including those in Trafford.
Newton Abbot
Question
Raises concern about Teignbridge receiving a negative change in this year’s settlement while Devon sees an increase.
Minister reply
Acknowledges the issue and offers to work with colleagues to ensure services are improved.
Jonathan Brash
Lab
Hartlepool
Question
Criticises the Conservative government's budget cuts in Hartlepool, urging recognition of their impact.
Minister reply
Agrees with criticism and commits to working closely with colleagues in Hartlepool.
Sarah Olney
LD
Richmond Park
Question
Raises concern over the fair funding formula's potential negative impact on London councils and those living in poverty.
Minister reply
Acknowledges concerns and commits to working with local authorities on raising income and ensuring financial sustainability.
Clive Jones
LD
Wokingham
Question
Asked if the Government has protected tier 1 local authorities from real-term cuts, honoured their commitment to a new fair funding formula by removing the recovery grant, and how they expect local authorities to afford dedicated schools grant deficits accrued up to 31 March 2028.
Minister reply
The Minister referred Clive Jones to her earlier answers.
Emily Darlington
Lab
Milton Keynes Central
Question
Welcomed the settlement and asked if she would meet them to talk about encouraging councils to build homes at the same rate as Milton Keynes.
Minister reply
The Minister agreed to meet Emily Darlington to discuss fast-growing cities and building homes.
Sarah Dyke
LD
Glastonbury and Somerton
Question
Asked if she accepted additional cost pressures are linked to geography and sparsity, and what steps were being taken to support large rural councils such as Somerset.
Minister reply
The Minister confirmed she recognised the issue and outlined steps being taken to address it.
Pam Cox
Lab
Colchester
Question
Asked for a timeline on funding that will do much to improve local services for local residents in Colchester.
Minister reply
The Minister stated the Government would release information to councils today so they can start budgeting and engage heavily with local authorities over months.
Tom Morrison
LD
Cheadle
Question
Asked why Stockport council missed out on the recovery grant and whether it opens up legal challenges.
Minister reply
The Minister expressed confidence in details being published today and stated they will be working with local authorities to set budgets.
Mohammad Yasin
Lab
Bedford
Question
Asked if the Government would invest additional funding to support growth due to planning permission for Universal Studios theme park.
Minister reply
The Minister agreed that it was a landmark moment and hoped today’s settlement would help them on this journey.
Helen Morgan
LD
North Shropshire
Question
Asked if she would provide exceptional financial support to get through the difficult period, work with MPs to ensure Shropshire council is put on a secure financial footing for the future.
Minister reply
The Minister thanked Helen Morgan and stated they will take decisions about financial support in the usual way.
Rosie Wrighting
Lab
Kettering
Question
Asked if the Minister confirmed this is a Labour Government sending the message that Kettering deserves its fair share.
Minister reply
The Minister praised Rosie Wrighting’s efforts and stated they were doing their best to meet the needs of Kettering.
Vikki Slade
LD
Mid Dorset and North Poole
Question
Asked if she would commit herself to working with the Department for Education to introduce a cap on charges and profits for specialist schools.
Minister reply
The Minister agreed to work with colleagues in the Department for Education and offered to investigate specific cases.
Naushabah Khan
Lab
Gillingham and Rainham
Question
Asked what changes mean for her local area, whether she would come to Medway to meet them and discuss how they can take on some of those other issues.
Minister reply
The Minister stated she was happy to visit the constituency and see for herself what could be done.
St Ives
Question
Asked if she would meet them, along with other local Members, to discuss issues regarding bespoke arrangements for the Council of Isles of Scilly.
Minister reply
The Minister agreed to meet.
Andrew Pakes
Lab
Peterborough
Question
The Conservatives blame councils for being poor despite overseeing 14 years of austerity and underfunding. Peterborough city council will receive £65 million more by 2028-29, which is a life-changer for many people. How can this money be used to transform communities?
Minister reply
Thanking Andrew Pakes for his consistent championing of Peterborough and visiting the area multiple times, Alison McGovern expressed confidence in the investment being made in Peterborough to help it thrive.
South Devon
Question
The multi-year settlement did not refer to pressures facing rural areas. Issues like SEND, care, bus services, and bin collections are more expensive due to the longer road network in Devon. Using deprivation as a funding formula does not account for older populations or hidden pockets of deep deprivation. Will hidden pockets of deprivation be recognised?
Minister reply
Acknowledging previous answers on rural areas, Alison McGovern reassured Caroline Voaden about the quality and accuracy of the latest indices of deprivation.
John Slinger
Lab
Rugby
Question
Welcoming the settlement that puts fairness at the heart of local government funding, John thanked the Minister for increased funding for Warwickshire. He noted there is not a single Reform UK MP in the Chamber and asked if this indicates Reform does not take local government seriously.
Minister reply
Alison McGovern agreed and pointed out that their first duty as MPs is to listen to constituents and be present in the House.
Lisa Smart
LD
Hazel Grove
Question
Welcoming the multi-year funding settlement, Lisa mentioned Stockport's concerns about being worse off despite having one of the most deprived parts of Greater Manchester. They missed out on a recovery grant by 0.01%. Will the Minister meet to work out how to ensure vulnerable constituents are not unduly impacted?
Minister reply
Alison McGovern confirmed she will meet Lisa Smart, Navendu Mishra and Mr Morrison to discuss this.
Steve Race
Lab
Exeter
Question
Welcoming the multi-year settlement, Steve thanked Alison for engagement on local areas. Devon county council is set to get a significant uplift in funding over years. Will this increase in funding have a positive impact on services and local people?
Minister reply
Alison McGovern highlighted consequences of council cuts in parks and town centres and committed to working with Steve Race to improve services for Gravesham residents.
Peter Swallow
Lab
Bracknell
Question
Between 2015-2020, the Conservative Government cut Bracknell Forest council’s funding by £500,000. This settlement sees a rise of almost £10 million—an increase of over 7%. Does my hon. Friend agree that this shows Labour will invest in local services while Conservatives choose austerity?
Minister reply
Alison McGovern thanked Peter Swallow for standing up for constituents and ensuring they get needed services.
Natasha Irons
Lab
Croydon East
Question
Welcoming the Government’s taking into account deprivation in funding, Natasha highlighted investment in poorest communities. Croydon is set to receive an extra £158 million over this Parliament. What is the timetable for getting this extra investment?
Minister reply
Alison McGovern thanked Natasha Irons for her work and committed to working with local authorities to set budgets in spring.
Elsie Blundell
Lab
Heywood and Middleton North
Question
Welcoming the additional investment, Mrs. Blundell raised concerns about firefighters attending flooding and water-rescue incidents up 40% over the last decade. Has any consideration been given to introducing a statutory duty on local fire and rescue services?
Minister reply
Alison McGovern thanked Elsie Blundell for raising climate change effects, assuring her that the Fire Minister will address this.
Daniel Francis
Lab
Bexleyheath and Crayford
Question
Five years ago, Bexley council sought a capitalisation order due to dire funding situation. Will Alison McGovern contrast today's announcement with the previous Government’s approach?
Minister reply
Alison McGovern thanked Daniel Francis for championing constituents and highlighted the chaotic situation under austerity versus the current long-term multi-year settlement.
James Naish
Lab
Rushcliffe
Question
Nottinghamshire county council received a £234 million increase over this Parliament, or 30%, making a huge difference. What decisions have been taken on avoiding cliff edges due to loss of new homes bonus and similar mechanisms?
Minister reply
Alison McGovern expressed willingness to meet Nottinghamshire MPs in the new year to discuss rurality and other issues.
Antonia Bance
Lab
Tipton and Wednesbury
Question
Black Country people are proud and resilient, but 50 years of deindustrialisation and 14 years of Tory austerity have left my borough of Sandwell the fifth most deprived in the country. Does the Minister agree with me that this Government can finally see deprived urban areas—post-industrial areas like mine—and is finally giving us back what we are due?
Minister reply
I very much agree. For those places that bore the costs of bad decisions many years ago and have never been able to get fully back on their feet, this is part of turning the corner.
Anna Dixon
Lab
Shipley
Question
Does the Minister agree that, with elections in May next year, if residents in my Shipley constituency want to see improvements in local services, they will need a Labour council working with a Labour Government?
Minister reply
My announcement today is a massive vote of confidence in the people of Shipley and of Bradford. I look forward to working with my hon. Friend to make sure that every penny piece of that investment improves her constituents’ lives.
Shadow Comment
David Simmonds
Shadow Comment
The shadow Minister criticised the settlement for assuming higher taxes everywhere, reducing resources at a local level, punishing efficiency, introducing new hospitality taxes, and implementing a homes tax that costs the Treasury money. He argued that rising business rates are crippling businesses, increasing pressure on communities. The response highlighted how councils would be left £1.5 billion worse off due to national insurance contributions alone.
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