£69 Billion To Support Councils And Help Deliver Plan For Change
The government has now published its finance settlement, which is the annual determination of funding to local government from central government. This briefing covers the provisional local government finance settlement for 2025/26 which was announced on 18 December 2024
£69 billion of funding will be injected into council budgets across England to help them drive forward the government’s Plan for Change through investment and reform and to fix the foundations of local government, ministers have announced, Wednesday 18th December.
The provisional Local Government Finance Settlement will provide £69 billion for councils across the country, a real-terms increase of 3.5% from 2024-25, which includes a new emergency £600 million Recovery Grant, offering better value for money through the repurposing of grants to help support councils most in need and maximise every penny of public spending to ensure it delivers for working people.
And £3.7 billion of funding will be made available to social care authorities to support adult and children’s services through the Settlement. This includes £880 million for the Social Care Grant – an increase of £200 million compared to what was indicated last month, taking its total to £5.9 billion – which will support councils to deliver care for adults and children in their communities, helping to reduce pressure on the NHS.
The government has said that no council will see a reduction in Core Spending Power. Places with a significant rural population will on average receive around a 5% increase in their Core Spending Power to ensure rural communities have the support they need. We are maintaining the previous government’s referendum threshold for council tax, which will be maintained at 3% with 2% for the adult social care precept to protect local taxpayers
Deputy Prime Minister, Angela Rayner said:
“Local leaders are central to our mission to deliver change for hard-working people in every corner of the country through our Plan for Change, and I know our councils are doing everything they can to stay afloat and provide for their communities day in day out.”
“We won’t take the easy option or shy away from the hard work needed to rebuild a more effective and efficient system. These kind of reforms won’t happen overnight, but we are determined to deliver fairer funding, ending postcode lotteries meaning everyone gets the support from public services they deserve.”
Professor Martin Green OBE, Chief Executive of Care England commented:
“Yesterday’s Local Government Settlement highlights the government’s continued failure to prioritise adult social care. While the announcement of additional £880 million funding is welcome, it falls far short of addressing the scale of the crisis. There is a real risk that local authorities, under immense financial pressure, will be left with no choice to divert funds they may have otherwise allocated to social care to other areas.”
“This is not the fault of local authorities who will be forced to make up to £1.4bn of savings in 2025-26 from Adult Social Care Budgets according to the ADASS, but rather a direct consequence of the government’s chronic underfunding of both the adult social care sector and local government budgets.”
Professor Green continues:
“Every delay, every cut, every ignored plea has real consequences for real people. It’s time for the government to stop turning a blind eye; this is no longer a hypothetical crisis. This is happening right now, and the government must act before it is too late.”
Vic Rayner, NCF CEO commented:
“While we welcome the additional funding of £880 million for adults and children’s social care, this won’t cover the increased costs for adult social care providers resulting from the Autumn budget. The costs of the Budget for social care have been estimated by Nuffield Trust to be £2.8bn.”
“Care and support providers have told us very clearly about the looming impact of the additional employer NICs contributions and the increase in the National Living Wage. Key findings from a survey of care providers carried out by the Care Provider Alliance laid bare the impact. 73% of respondents said they would need to refuse to accept new packages of care from councils or the NHS and 64% would need to let staff go. Clearly the scale of the financial challenge facing adult care and support providers is simply much greater than the additional funding announced today; £880m for both adult and children’s social care is not going to provide sufficient funding to enable local authorities to meet the increased costs that providers face as a direct result of the Budget.”
“This inability to recognise and understand the importance of care and support in millions of people’s lives every day is incredibly disappointing and this settlement will do little to address the urgent issue of unmet need. There are an estimated 418,029 people currently waiting for a care and support assessment to allow them to stay at home, living well with choice and independence. This figure only represents people that Local Authorities are aware of.”
“We join other voices in urging Treasury officials to exempt social care and support providers from these increases in employers NIC, or alternatively to fully fund the increased costs. This must be followed up at the June spending review with significant investment in the longer-term reform of adult social care. Only by taking these steps can the government turn rhetoric into action, prove themselves willing to tackle the difficult issues and transform social care for the millions who depend on it and work tirelessly to provide it”.
