Press release

£60 billion funding package for councils in England to deliver vital services

The provisional local government finance settlement has confirmed an almost £60 billion package for councils in England for the next financial year.

From:
Department for Levelling Up, Housing and Communities and The Rt Hon Michael Gove MP
Published
19 December 2022
  • Levelling Up Secretary confirms £59.5 billion funding package for councils – a 9% increase on the previous year
  • Government stands behind local authorities and households in challenging times
  • Health and social care prioritised with additional grant of around £2 billion
  • Alongside the settlement, a new £100 million scheme for councils will protect the most vulnerable households from council tax rises

The Levelling Up Secretary Michael Gove has today (19 December 2022) confirmed an almost £60 billion package for councils in England for the next financial year to ensure that councils can continue to deliver vital frontline services.

The settlement means councils across England will benefit from an additional £5 billion – a 9% increase on last year’s settlement – as the government continues to stand behind councils and public services in the face of financial pressures.

The agreement for next year includes a one-off Funding Guarantee that ensures every council in England will see at least a 3% increase in core spending power before any local decisions around council tax are taken. Alongside this, government is today confirming a new £100 million scheme for councils to protect the most vulnerable households from council tax rises – delivering on the manifesto commitment to protect local taxpayers from excessive increases.

Social care is being prioritised too, with the government providing £2 billion in additional grant funding for adult and children’s social care for 2023/24. There is also £300 million for NHS England to help boost capacity by easing patient discharge.

After listening to councils, the government has offered greater certainty up to 2024/25, outlining spending over the next 2 years, which will allow town halls to plan ahead with confidence.

Levelling Up Secretary Michael Gove said:

Local government plays an absolutely vital role in helping us to level up, support the most vulnerable, and deliver key services that people rely on every single day.

We recognise the pressures councils are facing right now and this spending boost will provide the support and funding local authorities need to continue delivering first rate public services.

The provisional finance settlement includes:

  • A generous total funding package for councils. Almost £60 billion for the next financial year – marking an increase of 9% on 2022-23 – will enable councils to plan ahead with more certainty and continue to deliver key services for residents.

  • More funding to areas that need it most. The most relatively deprived areas of England will receive 17% more per household through this year’s settlement.

  • A real-terms funding boost across England. Taken together, the local government finance settlements for 2022/23 and 2023/24 show a real terms increase in the funding available to local government in England.

  • Support for all tiers of local government. Not only are we providing around £2 billion of additional grant funding for social care, we are also introducing a one-off funding guarantee. This will ensure that every council sees at least a 3% increase in core spending power next year before any local decisions to increase council tax rates.

  • Help for the most vulnerable in society. We are also today announcing £100 million of additional funding for local authorities to support the most vulnerable households in England. This funding will allow councils to deliver additional support to the 3.8 million households already receiving council tax support, whilst also providing councils with the resources and flexibility to determine the local approaches to support other vulnerable households in their area. This funding supports the government’s council tax referendum package, which strikes a fair balance to ensure taxpayers are not over-burdened at a time of significant pressure on the public finances.

The provisional settlement consultation will be open for 4 weeks, closing on 16 January 2023.

The government will provide confirmation of the final local government finance settlement in the New Year.

Further information

Further details on all of the above, including allocations for individual councils and our consultation document, can be found on the provisional local government finance settlement page.

Core spending power is a measure of the resources available to local authorities to fund service delivery. It sets out the money that has been made available to councils through the local government finance settlement.

The most relatively deprived areas of England (the upper decile of the Index of Multiple Deprivation) will receive 17% more per dwelling in available resource through this year’s settlement than the least deprived areas.

The government has paused reforms to local government funding through the Relative Review of Needs and Resources and a reset of accumulated business rates growth been paused for the remainder of this Spending Review. We remain committed to improving the local government finance landscape in the next Parliament.

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Published 19 December 2022

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