The last Spring Budget before the General Election did not contain any measures to adequately fund the local services people rely on every day, the LGA has concluded.
Councils continue to transform services but, given that core spending power in 2024/25 has been cut by 23.3 per cent in real terms compared with 2010/11, it is unsustainable to expect them to keep doing more for less in the face of unprecedented cost and demand pressures.
LGA analysis shows by 2024/25 these cost and demand pressures will add £15 billion (28.6 per cent) to the cost of delivering council services since 2021/22.
Almost two-thirds of service spending by councils with social care responsibilities in 2023/24 was on services for adults and children – this is up from 56.5 per cent in 2016/17.
An LGA survey also found that 85 per cent of councils would still have to make cost savings to balance their 2024/25 budget, despite the extra £600 million announced in the final local government finance settlement.
The Chancellor did announce a last-minute six-month extension of the Household Support Fund, which will help councils to continue supporting households facing hardship. While this was welcome, uncertainty over the future of the fund has left councils and their charitable partners unable to plan effectively.
Councils could find themselves in this position yet again in September.
There was also some additional funding for children’s social care, and plans to expand capacity and ensure children receive the help they need in the most suitable homes.
Fixing the broken market for children’s social care placements will take time and ongoing investment, but this is a step in the right direction.
However, it is disappointing and concerning that the Spring Budget provides no new investment for adult social care nor temporary accommodation.
People who draw on care and support will understandably be worried about the continuing impact of significant pressures on the service; while councils are spending at least £1.74 billion supporting 104,000 households in temporary accommodation – both the highest figures since records began.
This year also saw the sixth one-year settlement in a row for councils.
Keeping councils on a financial drip feed in this way has led to the steady weakening of local services.
Councils need greater funding certainty through multi-year settlements to prevent this ongoing decline and to also ensure key national government policies – such as boosting economic growth, creating jobs and building homes – can be achieved.
Departmental spending
- After 2024/25, planned departmental day-to-day spending will grow at an average 1 per cent a year in real terms.
LGA view: “Councils of all political colours are starting this financial year (2024/25) in a precarious position and having to scale back or close a wide range of local services, so the continued squeeze in public spending in the years ahead is a frightening prospect for communities.”
Long-Term Plan for Towns
- £400 million to extend the Long-Term Plan for Towns to 20 more places across the UK.
LGA view: “This extension will bring benefits to those 20 places that will receive additional funding. Inclusive economic prosperity and growth is a priority for all councils. We want to work with government so that all areas will be able to deliver more through a single, flexible, and fully devolved long-term funding pot.”
Household Support Fund
- Additional £500 million (including Barnett funding for Wales, Scotland and Northern Ireland) to extend Household Support Fund to September 2024.
LGA view: “This will enable councils to continue to provide vital support and advice to households facing hardship. It is disappointing that we had to wait until the very last minute for an extension, and that it is only for a short period.”
Children’s social care
- £45 million match funding for 200 more open children’s home placements.
- £120 million for maintenance and rebuild of existing secure children’s homes.
- Proposals later this year on combating profiteering and creating a more sustainable market for residential placements.
LGA view: “Councils have been highlighting for some time that with more children needing help with increasingly complex and challenging needs, it is becoming increasingly difficult to find suitable homes for children in care.
“The astronomical costs of some care placements means there is less money available for councils to spend on earlier support for children and families.”
Adult social care
- No new investment.
LGA view: “Waiting lists for care assessments or the provision of support/direct payments or care plan reviews remain stubbornly high. Serious recruitment and retention challenges continue to beset the workforce. Unmet and under-met need remains, pointing to issues with access to care and support.”
Early years education and childcare
- Increases in hourly rates for free hours childcare for the next two years.
- Eight-week window for local authorities to communicate final hourly funding rates to providers.
- Local authorities to pass at least 97 per cent of funding to providers.
LGA view: “The expansion of early years entitlements to support more families into work is welcome. However, historic underfunding and wider pressures mean the early years sector will remain under pressure without further reform. Councils…need to have sufficient resources and be given the right levers and powers to manage local childcare markets.”
Business rates
- Empty Property Relief ‘reset period’ extended from six to 13 weeks from 1 April 2024 in England.
- Government to consult on a ‘General Anti-Avoidance Rule’.
- 40 per cent reduction on gross business rates bills for eligible film studios in England until 2034.
LGA view: “The LGA has long been concerned about business rates avoidance. It welcomes the Government’s commitment to tackle this issue and… to extend the reset period for empty property relief, however, we believe this should have been extended to six months.”
Levelling up for culture
- £100 million of funding for culture projects (subject to business case).
LGA view: “Investment in cultural infrastructure drives local economic growth, reduces spend on acute health and wellbeing services, drives educational outcomes, and improves quality of life. Access to culture is not evenly distributed and measures to address this challenge are very welcome.”
Vaping
- New duty on vaping products from 1 October 2026.
- One-off tobacco duty increase of £2 per 100 cigarettes or 50 grams of tobacco from 1 October 2026.
LGA view: “There is an important balance to be struck in making sure that cigarettes remain taxed at a higher level than vapes, which can be a useful tool to cut smoking.
“While a new duty on vapes is welcome, we continue to highlight that local authority trading standards teams have seen a significant reduction to core budgets over recent years, and continue to face acute staff shortages.”
Special free schools
- Initial £105 million towards 15 new special free schools for children with special educational needs and disabilities (SEND) across England.
LGA view: “Feedback from councils is that the speed at which new special school places can be brought online is too slow and will not solve the worsening financial crisis in supporting children with SEND.”
Temporary accommodation
- No new investment.
LGA view: “We are disappointed that the Budget provides no support to address the spiralling cost of temporary accommodation. Building more genuinely affordable homes remains the best way to help families struggling to meet housing costs, provide homes to rent, reduce homelessness and tackle council housing waiting lists in the long term.”
Right to Buy
- Cap on percentage of a replacement home that can be funded from Right to Buy receipts to increase from 40 to 50 per cent.
LGA view: “This policy change is welcomed. However, this Budget missed a key opportunity to allow councils to permanently retain 100 per cent of sales receipts.”
Read the LGA’s ‘Spring Budget 2024: on-the-day briefing’
