Provisional Local Government Finance Settlement 2026/27: CCN consultation response

This joint response from the County Councils Network, the Society of County Treasurers (SCT) and the Association of County Chief Executives (ACCE) sets out significant concerns about the government’s provisional Local Government Finance Settlement for 2026–27 and the outcome of the Fair Funding Review (FFR) 2.0.

While the three organisations had previously welcomed elements of the summer FFR consultation, the response argues that the settlement, which is based on the review outcome, has been shifted away from objective analysis and towards decisions that disproportionately benefit cities and metropolitan authorities at the expense of county and rural areas.  

The CCN warns that the settlement leaves county authorities heavily dependent on council tax increases. Despite this they face a widening funding gap, as a result of escalating costs in social care, SEND, and wider service pressures. Updated modelling by PwC for this response shows a rising structural deficit for CCN member councils, with an estimated cumulative funding gap of £11.3bn between 2026/27 and 2028/29 - almost half of the national total.  

The response concludes that the settlement is insufficient to deliver stable, sustainable services:

• Ministers deviated from the evidence‑led proposals consulted on over the summer, removing the ‘remoteness’ elements of funding formulae, and continuing the Recovery Grant, shifting resources toward urban authorities.  
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• CCN members lose over £500m collectively from these late changes.  
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• County authorities receive below‑average Core Spending Power (CSP) increases; 92% of CSP growth in shire counties is dependent on maximum council tax rises of 5%.
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• Only 4% of CCN members’ three‑year CSP increase is funded through grant, compared to 53% for metropolitan authorities.
  
• CCN members’ funding gap is projected to rise to £4.9bn by 2028/29.  

The consultation response recommended that government:

• Provides significant additional funding for counties at the final settlement.
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• Reduces reliance on council tax for increases in core spending power and remove second‑home premium growth from taxbase assumptions. Reinstates remoteness adjustments across all needs formulae.
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• Removes or reduces the amount allocated through the Recovery Grant.
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• Redesigns transitional arrangements and funding floors to ensure a fairer outcome.
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• Revisits business rates pool allocations to ensure counties receive a fair share of at least 30%.
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• Sets out a comprehensive plan for resolving historic SEND deficits.