Local Government Finance Settlement: £64 Billion Funding, but Criticisms Remain

The UK Government has announced a local government finance settlement providing £64 billion in funding for the upcoming year, a 6.5% cash increase from the previous year. This settlement includes a minimum annual 3% uplift in core spending power, which is the amount councils have to spend from a combination of Government grants, council tax, and business rates. Despite this significant funding, local authorities remain concerned about their financial stability, with seven councils having issued a section 114 notice declaring they are unable to balance their budgets since 2020. The Government's decision not to provide emergency funding has been met with criticism from opposition parties and local authorities, who argue that it will lead to severe reductions in services and higher council tax rises.

Key Takeaways:

• The local government finance settlement provides £64 billion in funding for the upcoming year, a 6.5% cash increase from the previous year.
• The settlement includes a minimum annual 3% uplift in core spending power, which is the amount councils have to spend from a combination of Government grants, council tax, and business rates.
• Despite this significant funding, seven councils have issued a section 114 notice declaring they are unable to balance their budgets since 2020.
• Local authorities are concerned about their financial stability, with some predicting that they will have to implement more severe reductions in services and impose higher council tax rises.
• Opposition parties have criticized the Government's decision not to provide emergency funding, arguing that it will lead to a crisis in local services.
• The Conservative-led County Councils Network (CCN) has warned that its members will be "bitterly disappointed" by the announcement and will have to implement more severe reductions in services and impose higher council tax rises.
• The Prime Minister's official spokesman has stated that the Government is giving councils an average 6.5% funding increase to help them deal with the pressures they face, but local authorities remain skeptical about their ability to manage their budgets.

Statistics:

• £64 billion: the amount of funding provided by the local government finance settlement for the upcoming year.
• 6.5%: the cash increase in funding from the previous year.
• 3%: the minimum annual uplift in core spending power.
• £59.7 billion: the amount of core spending power provided in 2023/24.
• Seven: the number of councils that have issued a section 114 notice declaring they are unable to balance their budgets since 2020.
• 13 years: the period of Tory economic mismanagement that local authorities claim is exacerbating the financial crisis.
• 6.5%: the average increase in funding provided by the Government.

Sources:

• Michael Gove, Levelling Up Secretary, written statement
• Barry Lewis, Conservative leader of Derbyshire County Council and CCN finance spokesperson
• Jim McMahon, shadow minister for local government
• The Prime Minister's official spokesman
• Local government finance settlement policy statement