Provisional Local Government Finance Settlement consultation: CCN response

This consultation response sets out the our analysis of the 2025/26 Provisional Local Government Finance Settlement.  We acknowledge the additional core funding announced at the Autumn Budget but warn that the settlement fails to meet the scale of pressures facing county and rural authorities.

Rising demand across social care, children’s services, SEND and home‑to‑school transport, combined with unfunded National Insurance and National Living Wage increases, leave CCN member councils in a worse financial position than before the Budget.  

The response is critical of the government’s new Recovery Grant, arguing that its methodology is opaque, deprivation‑heavy and ignores evidence on the wider cost drivers impacting local government.

The main arguments put forward in the submission are:

• The settlement does not cover the full cost of NICs and NLW increases, resulting in major unfunded pressures for county authorities.  
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• The new £600m Recovery Grant is heavily skewed towards metropolitan areas, with CCN members receiving only £20m (3.4%).  Abolition of the Rural Services Delivery Grant disadvantages rural authorities with high sparsity‑related costs.  
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• The settlement employs excessive and inconsistent council tax equalisation, placing further pressure on CCN councils to raise tax levels.  
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Recommendations put forward to improve the financial situation facing CCN members include:

• Government should publish the evidence underpinning the Recovery Grant methodology and revise it to reflect all major cost drivers.
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• Reinstate dedicated support for rural areas, including the Rural Services Delivery Grant.
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• Ensure future funding reforms are transparent, evidence‑based and co‑produced with local government.
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• Address unfunded NICs/NLW costs to avoid destabilising essential social care services.
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• Apply consistent, proportionate council tax equalisation, avoiding piecemeal adjustments.