Today the Chancellor has unveiled the 2025 Budget, which contained a range of announcements relevant to local government.
In particular, the government announced that all SEND expenditure will be funded by central government from 2028, though it has yet to set out how it intends to address councils' SEND deficits before then.
For the first time, the OBR has highlighted SEND deficits as a concern in its Economic and Fiscal Outlook. Read it here.
Below, the County Councils Network responds to the 2025 Budget.
Cllr Matthew Hicks, Chair of the County Councils Network, said:
“Following last week’s announcements that even more council funding will likely be redistributed from county areas to urban cities through the Fair Funding Review, the OBR has today highlighted this as a significant financial risk to those local authorities who lose out. The County Councils Network (CCN) urged the Chancellor to provide additional funding to ensure our member councils have the resources they need to prevent cuts to services.
“With the increase in the national living wage adding further pressure to their budgets and the government providing no new resources in return, our councils are facing even greater funding shortfalls over the next few years. The government must look again at its funding reform proposals and set out a substantial increase in core funding for councils in the Local Government Finance Settlement to ensure the fair funding review does not lead to more councils requiring exceptional financial support.”
“A government commitment to fully fund SEND spending by 2028 is, on face value, a positive step in limiting councils’ exposure to unsustainable expenditure. But there remains uncertainty on SEND deficits, which we estimate could rise to £18bn by 2028.
“With OBR red-flagging these existing deficits to the Chancellor as an issue that could lead to council bankruptcies, the government must move beyond promises of a solution and set out decisive action to wipe historic deficits at next month’s local government settlement, followed by fundamental reform that improves outcomes for young people.
“The Treasury also highlights local government reorganisation as a key means of generating future public sector savings. However, this can only be achieved by creating councils of sufficient size and scale. Analysis by PwC, commissioned by CCN, and previously cited by government, shows that creating local authorities covering over 500,000 people could save £1.8bn nationally whereas splitting up counties into smaller councils could end up costing taxpayers over £800m.”
