Final Settlement confirms over £69 billion government funding for councils, a 6.8% cash-terms increase in Core Spending Power
More than £69 billion in funding for England's councils has been confirmed today as the government delivers on its commitment to restore trust and stability in public services.
Following the provisional Settlement in December, today's final Settlement provides a 6.8% in cash terms increase in councils' Core Spending Power compared to 2024-25. With increased demand and running costs rising, this money is a lifeline and will guarantee no council sees a decrease in their Core Spending Power.
Families across the country rely on crucial council services such as social care, which is why the government is providing up to £3.7 billion additional funding to social care authorities to deliver this. This includes an £880 million uplift to the Social Care Grant, compared to 2024-25.
A new £270 million Children's Social Care Prevention Grant will support the national roll out of vital family help, keeping children safe and ensuring they get the best start in life as set out in the Plan for Change.
While fundamental change cannot happen overnight, the government is working at pace with the sector to deliver the ambitious reform needed to spread power, money and resources more fairly across the country.
Today, £60 million has also been confirmed to fund long-term improvements to the local government sector over the next year, including empowering mayoral areas leading the devolution revolution in delivering local priorities and supporting councils' financial reporting with a fit and legal audit system to ensure transparency.
Rebuilding the sector from the ground up is a crucial step towards the national Plan for Change to bring better value for money, sustained economic growth and fix our country's public services.
The government has maintained the 5% referendum principles on council tax increases - the same level set by the previous administration- to protect taxpayers from excessive increases.
Unlike previous years, this government has introduced a stricter approach to the inherited arrangements that allowed councils to request higher council tax increases if they need Exceptional Financial Support and see increases as critical to maintaining their financial sustainability.
This approach puts taxpayers at the forefront, for example by only agreeing increases where councils are amongst the lowest existing levels for tax. In fact, taxpayers in these areas are still expected to be paying less than the average council tax compared to similar councils. This approach has limited the number and scale of additional increases, with the government not agreeing where councils have asked to increase council tax by a very high amount or by high amounts in successive years.
Deputy Prime Minister, Angela Rayner said:
Councils deliver vital services across the country - driving growth and local economies and providing a lifeline for those that need it most.
Through our Plan for Change we are determined to fix the foundations of local government; investing where it is needed, trusting local leaders and working together to deliver growth, better health and social care services and the affordable homes people need.
Minister of State for Local Government and English Devolution, Jim McMahon OBE said:
We have been clear we will fix the foundations of local government. That means an end to short-term solutions and instead rebuilding the sector to put councils on a more stable and secure footing.
>Local leaders play a crucial role in delivering the day-to-day services communities across the country rely on, which is why we want to work with them towards a fairer funding model that tackles regional inequality and prioritises outcomes for local people.
This final Settlement marks an important step towards a government focused on efficiency, value-for-money and a community first approach. For the first time, a new £600 million Recovery Grant will help support places most in need, which maximises public spending to ensure it delivers more meaningful outcomes.
The sector is already having its say via an open consultation on how to best streamline the outdated funding model and distribute taxpayer's money more fairly, based on an updated assessment of need, enabling every council to deliver high quality services to their communities.
As part of handing local leaders more power and control of their funding, the government will end outdated processes and bureaucracy of bidding for different funding pots and bring forward the first multi-year settlement in a decade in 2026-27 to provide certainty and economic security to councils setting budgets.
The provisional settlement consultation was open for 4 weeks and closed on 15 January 2024.
