The UK Government has announced additional funding for councils in England, including towards the cost of increases in employers’ National lnsurance contributions – as called for by the LGA in December (see first 700).
But the LGA has warned that the latter falls short of what is needed and that councils continue to face “severe” cost and demand pressures.
Local authorities in Wales will receive £6.1 billion from the Welsh Government Revenue Support Grant and non-domestic rates in 2025/26 – an increase of 4.3 per cent compared with the current year.
While welcoming the increase, the Welsh LGA has warned that “over a decade of savage cuts and lack of investment in the public sector cannot be undone overnight in one settlement” (see ‘Part of the solution’ for the Welsh LGA’s analysis of the provisional local government settlement in Wales).
The provisional settlement in England, published just before Christmas, indicates that councils’ total core spending power will rise by 6 per cent in 2025/26.
Cllr Louise Gittins, LGA Chair, said the extra funding “will help councils meet some – but not all – of the pressures they face”, including in adult and children’s social care, homelessness prevention, and support for children and young people with special educational needs and disabilities.
While the Government has provided £515 million towards direct employer National Insurance contributions, this falls short of the £637 million the LGA has estimated they will cost – while its estimate of indirect costs, through commissioned providers, stands at £1.13 billion.
Cllr Gittins said: “Councils of all types will continue to struggle to balance the books next year, with many having to increase council tax bills to bring in desperately needed funding but still being forced to make further cuts to services.
“The Spending Review will be critical to the future of our local services. It is good that the Government has committed to multi-year settlements, but it must include significant and sustained increases in overall funding for councils.”
- For more on the LGA’s response to the provisional local government finance settlement in England, please see ‘Addressing challenges’.