Wednesday 22 May 2024
12.5 C

Government gives councils £600 million in support funds

Councils across England will receive a £600 million support package, in addition to funding outlined at the provisional settlement, to help them deliver key services, the Levelling Up Secretary has announced today.

The support package comes as the government claims that it has made significant progress on its economic priorities of halving inflation, growing the economy and reducing debt. Because of the progress made, it says it can support councils to deliver key services across the country.

The government said it values the important contribution councils make and has conducted an extensive engagement and listening programme with councils to understand the pressures they are facing including high inflation, driven by the legacy of Covid, and global instability with war in Ukraine and the Middle East. It goes on to say that today’s £600 million announcement reflects the unprecedented challenges that they have faced.

The support package will primarily see an additional £500 million added to the Social Care Grant to bolster social care budgets, a key concern raised by councils.

All councils will also see an increase in Core Spending Power of at least 4% through the Funding Guarantee before any local choices on council tax, efficiencies or reserves – an increase from the 3% announced at the provisional settlement. The Government’s manifesto commits to continuing to protect local taxpayers from excessive council tax increases.

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The proposed referendum principles strike a fair balance. Local authorities must be mindful of cost-of-living pressures when making any decisions relating to council tax.

Councillor Richard Jackson, Nottinghamshire County Council Cabinet Member for Finance, said:

“The Government’s announcement of half a billion pounds more for upper tier councils is fantastic news.”

“Nottinghamshire County Council is already a very well-run local authority, but like all councils we have been facing significant financial pressures.

“Our share of this funding will ease those pressures and give us the opportunity to invest more in helping the most vulnerable people in our county, setting them on course to happier, healthier and more independent lives.”

“Without question, Councillor Ben Bradley has been hugely influential in securing this extra money for Nottinghamshire. As Leader of this County Council and MP for Mansfield he not only understands the challenges facing local government but is in a position to explain these challenges personally and directly to ministers.

“Ben has been a spearhead for the County Council Network’s campaign urging the Government to provide an emergency injection of funding for councils and he was lead signatory on the letter sent by the County All Party Parliamentary Group to Rishi Sunak and Michael Gove, making the case for more council funding.

“Clearly this message has been heard and the Government has listened. Nottinghamshire will feel the benefit when we bring forward this council’s budget proposals, setting out our plan to deliver sustainable services in 2024/25 and beyond.”

This funding builds on the £64 billion package already announced at the provisional Local Government Finance Settlement for 2024-25, and has been welcomed by leading local government organisations including the Local Government Association, County Councils Network and District Councils Network.

Levelling Up Secretary Michael Gove said:

“We have listened to councils across England about the pressures they’re facing and have always stood ready to help those in need.

“This additional £600 million support package illustrates our commitment to local government. We are in their corner, and we support the incredible and often unsung work they do day-to-day to support people across the country.”

In light of the exceptional circumstances, the Treasury will be providing £500m with further details set out at the upcoming Budget whilst details on the distribution of this funding will be included in the final Local Government Finance Settlement early next month.

The further £100m comprises of an increase to the Funding Guarantee from 3% to 4%, £15m for the Rural Services Delivery Grant, £3m for authorities with Internal Drainage Boards, and additional funding for the Isle of Wight and the Isles of Scilly with the remainder distributed through the Services Grant.

The £15m through the Rural Services Delivery Grant for rural councils is the largest cash increase since 2018-19 and the second successive year of above-inflation increases, whilst the £3 million is for authorities facing high levies from Internal Drainage Boards which help protect residents from flooding.

The £500 million increase in social care funding is in addition to the £1 billion in additional funding announced at Autumn Statement 2022 and in July 2023, to enable councils to continue to provide crucial social care services for their local communities, particularly for children.

The government is clear this funding is to be used to address the pressures facing councils and improve performance. It should not be put aside for later use or spent on areas that are not a priority. Separately, councils will be asked to produce productivity plans which will set out how they will improve service performance and reduce wasteful spend – including on consultants and HR spending on equality, diversity and inclusion.

Alongside this, an expert panel to advise the government on financial sustainability in the sector will be established by DLUHC and contain both internal and external experts. Work will also continue between DLUHC, DfE and DHSC to ensure value for money and sustainability of the sector.

Councillor Shaun Davies, Chair of the Local Government Association, said:

“The LGA welcomes that the Government has acted on the concerns we have raised and recognised the severe financial pressures facing councils, particularly in providing services to the most vulnerable children and adults through social care services and delivering core front-line services to communities.”

“We will continue to work with Government to achieve a sustainable long term funding settlement and updated distribution mechanisms, as well as legislative reform where needed, so that local government can play its full part in delivering inclusive prosperity and growth through investment to support people, places, and the planet.”

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