Local Government Finance: Disadvantaged
The question
To ask the Secretary of State for Housing, Communities and Local Government, what steps her Department is taking to ensure areas with higher levels of deprivation receive adequate funding.
Answered by Jim McMahon
The final Local Government Finance Settlement for 2025-26 makes available over £69 billion for local government in England, which is a cash-terms increase of 6.8% in Core Spending Power on 2024-25. The most relatively deprived areas of England will receive 23% more per dwelling in Settlement funding than the least deprived areas.
The government is directly accounting for deprivation in the way it allocates funding, such as through the new one-off ‘Recovery Grant’, worth £600 million. The Recovery Grant will start to correct the unfairness of the current system by putting councils in the areas with greater need and demand for services on a more stable footing. This will lay the foundations for more fundamental funding reform, including an updated assessment of need, from 2026/27.
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