Local Government Finance
The question
To ask the Secretary of State for Housing, Communities and Local Government, whether she has responded to the Unite trade union request for fair council funding of 19 May 2025.
Answered by Jim McMahon
The previous government committed to improving and updating the way in which local authorities are funded through the “Fair Funding Review” - but this was not delivered. We will make good on this commitment and implement long-awaited reforms through a multi-year settlement in 2026-27. We will set this out in more detail through further consultation following the Spending Review, and welcome views across the local government sector and the public.
Councils are responsible for their own financial management, and this includes ensuring that borrowing is affordable and managed sensibly. The Government has already announced that, where councils deem it necessary to undertake additional borrowing to support their financial recovery, we will not replicate the previous government’s punitive approach of making that borrowing more expensive through an additional 1% premium.
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