Local Government Finance

The government is under no illusion about the fragile state of the sector and the pressures that some councils are facing to deliver for residents. We also recognise the potential for continued instability as we work to fix the foundations of local government. That is why we confirmed in the autumn that we will continue to have a framework in place to support councils in the most difficult financial positions.

However, this government has been clear that we will take a different approach to supporting councils in financial difficulty, to ensure it is effective, collaborative and delivers value for money – while still protecting the interests of taxpayers. For example, we have been clear that we do not believe in punishing councils and have removed the punitive approach of making borrowing more expensive where a council seeking additional financial support has no other choice.

On council tax flexibility for areas seeking exceptional financial support, we have put taxpayers at the forefront by avoiding excessively high increases and only agreeing increases where councils have comparatively low existing levels of tax and plans to protect the lowest income residents.