Local Government: Public Expenditure
The question
To ask the Secretary of State for Housing, Communities and Local Government, with reference to paragraph 2.3.1 of her Department's publication entitled The Fair Funding Review 2.0, published on 20 June 2025, what assessment she has made of the potential impact of lower funding allocations to local authorities with stronger council taxbases on levels of council tax.
Answered by Jim McMahon
As part of the Fair Funding Review 2.0 consultation, the government is inviting views on using some grant for a funding floor, to ensure that local authorities’ income is protected by a specified amount across the multi-year Settlement. We propose continuing the existing policy that any protection offered through a funding floor assumes local authorities use their full council tax flexibility.
The Spending Review confirmed that the government intends to maintain the 3% core council tax referendum principle and a 2% principle for the adult social care precept, in line with the previous government’s policy and OBR forecasts. These principles protect working people and ensure residents have the final say on excessive increases.
We have set out further detail on these proposals and are inviting views on their potential impact, in the Fair Funding Review 2.0, which is open until 15 August 2025. Final referendum principles will be confirmed at the Settlement in the usual way.
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