Councils To Get Exceptional  Financial  Support To  Balance Books

Councils struggling to balance the books will be granted financial flexibility by the government to ensure vital services communities rely on will continue running the government has said.

The announcement follows news that one in five councils with social services responsibilities in England are likely to be given government bailouts to enable them to balance their books in 2026-27.

A number of local authorities will be issued with support, subject to meeting conditions, through a process known as Exceptional Financial Support allowing them to use their capital funding – including receipts from sales and borrowing – to cover day-to-day costs.

The Exceptional Financial Support process has existed since 2020 to help councils facing financial failure set balanced budgets. This government is committed to going further than before and will support councils to transform services and move towards sustainable recovery.

The need for councils to apply for this support reflects the worst of an outdated funding system which the government is taking steps to tackle. £78 billion is being made available to local authorities in the first multi-year funding settlement in over a decade, enabling more councils to restore local services.

The package also marked a turning point in the way local government is funded, using a new evidence-based approach – including the latest Indices of Multiple Deprivation – that properly recognises local need and the true costs of providing services in deprived areas.

Minister for Local Government and Homelessness, Alison McGovern said: 
“People in deprived areas have been let down for too long, with councils in the poorest areas left on their knees and services cut back as a result.

“The support we’re announcing is critical for the councils, and we are doing everything we can to ensure councils can balance the books, including by making £78 billion available through the first multi-year settlement in a decade.”