Local Government Finance Settlement 2026-29: CCN responds

Today the government has published its final Local Government Finance Settlement, covering the next three years.

This settlement concludes the Fair Funding Review 2.0, which updates the distribution of funding to local authorities. Ministers have also announced today another £440m for the Recovery Grant, which is targeted towards specific local authorities.

The County Councils Network has raised concerns over this approach, with evidence showing that government grants will cover just 2p out of every £1 in extra costs for county and unitary councils, compared to 42p in every £1 in costs for metropolitan boroughs - the type of council set to overwhelmingly benefit from this new funding.

Cllr Steven Broadbent, Finance Spokesperson for the County Councils Network, said:

“The final Local Government Finance Settlement confirms that the government will correct the distribution of business rates pooling gains from the provisional settlement, meaning that county councils will rightly receive their fair share of these resources to support upper-tier services. But while this is welcome news to those councils, we are disappointed that, having found some of the additional funding the County Councils Network (CCN) has been calling for, ministers have chosen to yet again unfairly target even more resources on a select cohort of urban and metropolitan councils.

“This is because the Recovery Grant overwhelmingly benefits urban metropolitan borough councils, yet analysis by CCN shows that they collectively face a funding gap of £180m next year whereas county and rural unitary councils face a colossal £2.7bn funding black hole. This shows that today’s decision to increase the Recovery Grant by a further £440m, rather than providing extra funding to all county and unitary councils, is patently unfair and compounds the decision to downgrade remoteness within the formula. Indeed, the re-introduction of the Recovery Grant has rightly been questioned by the independent organisations such as the Institute for Fiscal Studies and today’s decision clearly demonstrates that choices are being made based on politics rather than genuine need.

“Overall, while this settlement provides additional funding for some of our member councils, the three-year period will be very challenging for all our member councils. County residents and their councils will be forced to make up a significant shortfall through council tax rises and cuts to local services as CCN members grapple with a multi-billion shortfall. We urge county MPs raise concerns about this and think of the impact on their local area when they come to vote on the proposals this week.”