House of Commons · Written Ministerial Statement
Multi-year Local Government Finance Settlement and Fair Funding Review
20 November 2025 · Ministry of Housing, Communities and Local Government
Proposed by Alison McGovern Lab Birkenhead
Summarised by AI from the official record, so it can contain mistakes.
At a glance
Key points
- The government is implementing a multi-year Local Government Finance Settlement to address fair funding for local authorities.
- Over 69 billion in funding is provided through the 2025-26 settlement, including a 600 million Recovery Grant for areas hardest hit by austerity.
- New grant funding of 3.4 billion is planned from 2026-27 to 2028-29, with continued recovery grants and core spending power guarantees.
Issue summary
The government is addressing the issue of fair funding for local authorities by implementing a multi-year Local Government Finance Settlement and announcing reforms to improve the funding system.
Action requested
The government is delivering the Fair Funding Review 2.0 reforms, providing over £69 billion in funding through the 2025-26 settlement, including a £600 million Recovery Grant for areas worst affected by austerity. It also plans to introduce new grant funding of £3.4 billion from 2026-27 to 2028-29, maintaining recovery grants and providing core spending power guarantees. These reforms aim to align funding with deprivation and need.
Key facts
- Over £69 billion made available to local authorities through the 2025-26 Settlement.
- A £600 million Recovery Grant introduced for areas suffering most from austerity.
- New grant funding of £3.4 billion over the period 2026-27 to 2028-29 announced at Spending Review.
- The government plans to maintain recovery grants and provide a funding guarantee to upper tier authorities.
- A 2.6% real terms average annual increase in Core Spending Power is expected over the Spending Review period.