Local Government Finance

This Government has delivered the first multi-year Settlement in a decade, realigning funding with need through the Fair Funding Review, alongside major investment in public services which have escalating costs, including investing £2.4 billion in children’s social care prevention and de-escalation, and £3.6 billion in funding for homelessness and rough sleeping prevention from 2026/27 and 2028/29, as well as launching a cross-government strategy to prevent homelessness before it occurs.

We are also providing greater flexibility and certainty for local authorities through streamlining nearly £57 billion in funding streams. As a result, councils have more freedom to be innovative in delivering the most effective and efficient public services for residents.

The Government is also ending the two-tier system of local government and establishing single tier councils everywhere. By reducing duplication, cutting waste and saving back‑office money, local government reorganisation can free up money which councils can reinvest into frontline public services, meaning better local services for residents and better value for money for taxpayers.

Where councils are still unable to set balanced budgets due to the cost of delivering high‑demand services as they recover from the legacy of outdated funding arrangements, we will support and challenge them to transform services and improve sustainability.