Local government finance policy published: CCN response

Earlier today the Department for Levelling Up, Housing and Communities published a Local Government Finance Policy Statement for 2023/24 and 2024/25 – a blueprint for local government spending over the next two years.

The policy document can be found here, and a written ministerial statement from Levelling Up Secretary Michael Gove here.

The intention of this document is provide councils with further details on how the government will approach the distribution of funding for 2023/24 and 2024/25, alongside wider clarification around other aspects of the local government finance system, including reforms and Dedicated Schools Grant.

The policy document announces that the statutory override for councils’ special educational needs budget deficits is to be extended for three years; this mechanism keeps these deficits off council budgets. It also announced the government’s re-commitment to the Fair Funding Review, but the policy’s implementation is delayed until 2025-26.

Below the County Councils Network (CCN) responds to today’s announcements.

Cllr Carl Les, County Councils Network Finance Spokesperson, said:

“The County Councils Network (CCN) welcomes the publication of today’s local government finance policy statement and the additional clarity it gives to local authorities on the approach to distributing resources to the sector for the two next financial years. We will now study all of the details to ensure that our member councils are receiving a fair share of available resources.

“The funding provided to local government over the next financial year will go a significant way to easing the inflationary pressures facing councils next year. However, county authorities still face very difficult budget decision next year, including on whether to increase council tax by the 5% permitted next year.

“With new reporting requirements in relation to the new adult social care grant and the Better Care Fund, we would urge the government to minimise conditions to ensure this funding can be used flexibility to meet the most acute pressures across both social care and the health service.

“Today’s statement also confirms the of the statutory override for Dedicated Schools Grant will continue for the next three years. This is necessary – the scale of the deficits accrued by local authorities as a result of external factors could be crippling for councils. But the override is not a panacea – we need to work with the government to find a long term solution through a combination of deficit write off and reform.

“Another delay to the Fair Funding Review is disappointing but not unexpected. Whilst our member councils are focused on immediate pressures as a result of inflation, we are pleased the review has not been scrapped. It is vital that the government revisits this policy and works towards implementing it in the future.”

Over the coming days, CCN will be undertaking further analysis of the proposals contained in the document with Pixel Financial Management, and specifically the impact on the distribution of resources for the next financial year, based on the information contained in the document.