Source · Select Committees · Housing, Communities and Local Government Committee
Third Report - Financial distress in local authorities
Housing, Communities and Local Government Committee
HC 56
Published 1 February 2024
Recommendations
2
Accepted in Part
Para 26
Include additional funding in 2024–25 settlement to bridge local authorities' £4bn gap, outlining prioritisation.
Recommendation
The Government must include additional funding in the local government finance settlement for 2024–25 to ensure local authorities bridge their estimated £4 billion funding gap. The Government must set out which local authorities are being prioritised and why for this …
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Government Response Summary
The government committed an additional £600 million for local authorities in 2024-25, prioritising social care councils and rural populations. It noted an overall increase in Core Spending Power of up to £4.5 billion, but stated longer-term support and multi-year settlements are matters for the next Spending Review in the next Parliament.
Ministry of Housing, Communities and Local Government
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Conclusions (1)
1
Conclusion
Accepted in Part
Para 25
Local authorities have seen significant reductions in their spending power coincide with increasing demand for their services and inflationary pressures exceeding those in the wider economy. Recent funding settlements, while increasing in cash terms, have not kept pace with these pressures leading to a downward spiral. The prospect of further …
Government Response Summary
The government acknowledges significant funding pressures and details recent additional measures for local authorities, including £600 million extra funding, increased rural grants, and a 4% Core Spending Power increase for all councils for 2024-25, while committing to return to multi-year settlements in the next Parliament.