Thank you for contacting me about local government spending power. Local Councils have a vital role in delivering essential public services and building stronger communities right across the country.
The Government has listened to councils about the pressures they are facing, including as a result of high inflation driven by the legacy of the pandemic and global instability. Ministers have recently announced an additional £600 million for local authorities, which includes £500 million to bolster social care budgets. The funding will also ensure all authorities see a minimum increase in Core Spending Power of four per cent - up from three per cent as previously announced - before taking local decisions on council tax. I am encouraged that the Government's work to halve inflation, grow the economy and reduce debt has meant it can now provide this extra funding to councils to continue providing vital services.
This funding builds on the more than £64 billion package already announced at the provisional Local Government Finance Settlement for 2024-25. Taken together, this means over £64.7 billion will be available to local authorities in 2024-25 - an above-inflation increase of up to £4.5 billion, or 7.5 per cent in cash terms.
Beyond the annual Local Government Finance Settlement, local authorities receive a wide range of funding from government departments to reflect their broad responsibilities. To help increase the effectiveness and efficiency of the current funding system, the Government has published plans to simplify the funding landscape for local authorities. This includes by simplifying existing funds and putting in place a new Funding Simplification Doctrine, which came into force in January 2024, to help assess suitable distribution methodologies for new funding streams.
I recently welcomed confirmation that the Isle of Wight Council will receive an additional £4 million in recognition of the ‘unique circumstances facing the council and its physical separation from the mainland’. I thank all those who were involved in achieving this for the Island. Further information can be found here:
https://www.bobseely.org.uk/news/government-confirms-ps4m-extra-iw-council-recognition-island-status
Thank you again for taking the time to contact me.