County Councils Network responds to final Local Government Finance Settlement

CCN Latest News, CCN News 2025 | 03 February 2025

Today the government has published its final Local Government Finance Settlement, ahead of MPs voting on the settlement later this month.

A large part of the finance settlement to be distributed to councils is the government’s £600m Recovery Grant. However, County Councils Network (CCN) member councils only receive 3% of this grant, which is heavily targeted towards urban councils.

The CCN had raised concerns about this approach in its consultation response to the proposals.

Download the network’s response to the consultation on the finance settlement here.

Below, the CCN responds to today’s final Local Government Finance Settlement.

Cllr Barry Lewis, Finance Spokesperson for the County Councils Network, said:

 “Today’s final Local Government Finance Settlement will be a disappointing one for the majority of county and unitary councils, and sets up a difficult twelve months for those authorities. With the government choosing to heavily target its £600m ‘Recovery Fund’ to local authorities covering major cities and towns at the expense of county areas, just 3% of this grant will go to County Councils Network (CCN) councils.

 “Compounding this is the increase in the National Living Wage and employers’ National Insurance, with the costs of these policies outweighing any additional funds made available in this finance settlement for county and unitary councils. Consequently, more than four in five CCN members say they are in a worse position than before the Autumn Budget and this finance settlement, and one third say their service reductions next year will now be severe. Considering there is very little fat left to cut from many of these services already, a further reduction will have a material impact on our residents.

 “It is important that decisions made in the finance settlement and the manner in which they have been made does not set a precedent ahead of the upcoming fair funding review. There has been nothing published so far that backs up ministers’ decisions to target funding so specifically by exclusively using deprivation within the funding formula, so it is imperative the fair funding review is carried out transparently.

 “Whilst deprivation is a reason some councils’ costs are high, it is not the sole reason. The CCN’s evidence shows that demand and market failure across adult and children’s social care and special educational needs services are the main reasons as to why councils across all four corners of the country are struggling. If the trend of this finance settlement does continue, the government will completely understate the very real financial pressures faced by councils outside of towns and cities and it will push many county and unitary councils to the brink.

 “The Local Government Secretary’s written statement today also references ending the ‘two-tier’ premium paid by taxpayers in county areas, and mending this broken system. If the government is to achieve its aim of streamlining local government, reform must be at the correct scale to make a difference to public services and to generate efficiency savings. That means building on the principle of new unitary councils covering populations of 500,000 people or more.”