Commons Sense

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Local Government Finance

28 November 2024

Proposing MP
Jim McMahon Lab Co-op
Oldham West, Chadderton and Royton
Type
Written Ministerial Statement
Department
Ministry of Housing, Communities and Local Government
View on Parliament.uk -->

At a Glance

Issue Summary

The government is addressing the financial challenges faced by local councils in England, including increased service costs and funding cuts over a decade.

Action Requested

The government has announced an additional £4 billion for local government services, with £1.3 billion allocated through the Local Government Finance Settlement. It will also update the local government finance system starting from 2026-27 and implement reforms to improve service delivery and accountability over the course of this Parliament.

Key Facts

  • The Autumn Budget announced £4 billion in additional funding for local government services, with £1.3 billion through the Local Government Finance Settlement.
  • A real-terms increase in Core Spending Power of around 3.2% is expected for local government in 2025-26.
  • An additional £680 million will be provided via the Social Care Grant and a new 'Recovery Grant' worth £600 million for places with greater need.
  • No local authority will see a reduction in their Core Spending Power after considering any increase in council tax levels.
  • The Rural Services Delivery Grant is being repurposed to better target funding towards areas with higher needs.
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