£69 billion for local councils
Released On 22nd Dec 2024
An additional £3.7 billion of investment will also go towards social care authorities to support adult and children’s services through the Settlement, which will include £880 million for the Social Care Grant. This is an increase of £200 from last month, bringing up the total to £5.9 billion, which will support councils in providing care for adults and children in their communities, taking the pressure off the NHS.
There should be no council that sees a reduction in Core Spending Power and communities that are largely rural will see an average five per cent increase in their Core Spending Power to ensure these rural communities are best supported. The previous government’s referendum threshold for council tax will remain intact, which will be maintained at three per cent with two per cent for the adult social care precept to protect local taxpayers.
Alongside extra funding, the government also has plans to suggest how to fundamentally fix the current funding system from 2026-27, by distributing public funding more daily and based on assessed need to make sure councils can deliver high-quality services.
In 2026-27 the government will announce the first multi-year settlement in a decade to deliver greater clarity and stability for councils, as well as fixing the foundations of the government sector, aware that a top-down Westminster-centric approach has left local leaders unable to deliver the public services their communities need.
In a move to stay accountable for public spending, the government has been clearing the audit backlog and carrying out an overhaul of the broken local audit system, which needs to be the bedrock of accountability, trust and confidence in councils to spend taxpayer money responsibly. The English Devolution White Paper sets forward the new measures to attempt to rebuild the local audit system, such as the creation of the Local Audit Office.
Moreover, a ten-week consultation has been launched on strengthening the Standards of Conduct Framework in England, which will strengthen the code of conduct and investigation processes for code of conduct breaches, as part of an incentive to ensure the UK is fit, legal, and decent.
By getting councils back on their feet and giving local leaders more control, stability, and certainty over their spending, we the government are determined to deliver better services for taxpayers and boost local economies across the nation. Today marks a landmark moment in achieving that goal by equipping local councils with new Social Care Funding that will ease the pressure off the NHS and ensure every child in Britain gets the best start in life as part of our Plan for Change.
Deputy Prime Minister, Angela Rayner said: “Local leaders are central to our mission to deliver change for hard-working people in every corner of the country through our Plan for Change, and I know our councils are doing everything they can to stay afloat and provide for their communities day in day out.
“We won’t take the easy option or shy away from the hard work needed to rebuild a more effective and efficient system. These kinds of reforms won’t happen overnight, but we are determined to deliver fairer funding, ending postcode lotteries meaning everyone gets the support from public services they deserve.”
Minister of State for local government and English devolution, Jim McMahon said: “We know councils are calling out for help which is why we have prioritised this vital increase in funding, but we must stop taxpayers’ money being thrown into a broken system.
“As a former council leader, I know too well that councils have suffered from short-term solutions. But we will fix this outdated system, turning to our partners in local government, working hand in hand to bring ambitious reform and do the long-term, necessary work to rebuild the foundations, and crucially, trust.”
Following the announcement, Cllr Louise Gittins, Chair of the Local Government Association, said: “Extra funding for councils next year will help councils meet some - but not all - of the pressures they face in adult and children’s social care, homelessness prevention and support for children and young people with special educational needs and disabilities. Councils of all types will continue to struggle to balance the books next year with many having to increase council tax bills to bring in desperately needed funding but still being forced to make further cuts to services.
“It is good that the Government has provided details of how it will compensate councils for direct costs they will face through increases in employer national insurance contributions (ENICs). However, this falls short of the £637 million we have estimated it will cost councils next year. We have also warned that indirect ENICs cost increases, through commissioned providers, will cost councils up to an extra £1.13 billion next year. While we are pleased that councils will receive extra social care funding, which will help towards these indirect costs, we continue to worry about the impact the ENICs rise will have on the organisations that the sector relies on to deliver vital care and support, especially smaller charities and providers. As we have warned, alongside more than 100 organisations this week, this will exacerbate the already unsustainable pressures facing vital local services."
