Local authorities welcome £500m funding announcement from the government

Today the government has announced an extra £500m for local authorities, following strong campaigning from the County Councils Network (CCN) and the County All-Party Parliamentary Group.

The extra resource will be earmarked for rising costs in children’s services and adult social care. It follows CCN advocacy which revealed that 70% of its members’ £650m overspend this year was on these two services alone.

Responding to today’s announcement, the CCN said it welcomed the additional funding and that the extra money will go ‘some way to easing the pressures’ its councils face, in particular escalating costs accrued over the last twelve months as a result in a spike in demand for services and historically high inflation. However, councils still face ‘difficult decisions’, including some service reductions and raising council tax by the maximum permitted.

The extra funding will be put into the final Local Government Finance Settlement, which sets out how much core funding councils receive for 2024/25. The settlement will be voted on in Parliament in the coming weeks.

Earlier this week, the CCN and County APPG co-ordinated a letter to the Prime Minister, which was signed by 46 MPs, including 44 Conservative MPs. This cohort included seven former cabinet members. The letter urged the government to make available emergency funding to alleviate councils’ pressures as soon as possible.

Prior to that, the CCN had highlighted that its members faced a £4bn deficit over the next three years, and were left in a significantly worse position after the Autumn Statement due to the announcement of an increase in the National Living Wage, which councils will have to pay for.

Only once in recent memory has additional funding been provided to councils in between the provisional and final local government settlement. The last time this occurred was in 2016, with the CCN saying that today’s announcement is a direct result of its campaign and letter co-ordinated by the network.

Responding to today’s announcement, Cllr Tim Oliver, Chairman of the County Councils Network, said:

“Over recent weeks the County Councils Network (CCN) has led the way in highlighting the extreme pressures facing county and unitary authorities, and the consequences of not providing them with emergency financial relief. This culminated in a letter to government last week, signed by an unprecedented 46 MPs which illustrates the severity of the issue.

“We strongly welcome the government listening to our concerns, and today’s announcement of an additional £500m will go some way to easing the pressures councils face, and in particular addressing the escalating demand and costs of delivering social care and home to school transport. I would like to thank the Prime Minister, the government, and County MPs for recognising those pressures and for responding very positively in supporting our case for additional funding.

“Whilst this extra funding will undoubtedly help us protect valued frontline services, councils, of course, still face difficult decisions when setting their budgets for 2024/25. Service reductions will still be necessary for councils in some areas to balance their books, while the majority of councils will still have little choice but to propose maximum council tax rises.

“Looking further ahead, reform of local government finance and the way in which we are expected to provide services is imperative. Councils require a long-term financial settlement to enable us to plan for, and meet, the demand from our growing elderly populations and the more complex needs of residents requiring social care. This must be coupled with a comprehensive reform programme to bring in line the funding envelope available to enable us to deliver effectively our statutory responsibilities.”

Cllr Ben Bradley MP, Chair of the County All-Party Parliamentary Group, added:

“Today’s announcement is a culmination of an effective campaign led by the CCN and County All-Party Parliamentary Group which was supported by a large cohort of county MPs from all parts of the country. I was delighted so many colleagues signed our letter, which showed the strength of feeling from county MPs.

“An extra £500m for the sector will be strongly welcomed by my parliamentary colleagues and will help us ensure that the worst case scenarios in terms of service reductions are avoided and valued frontline services are protected. Councils still face difficult choices this year and next, and that’s why councils need a long-term sustainable funding settlement and reform to our statutory responsibilities moving forward.”