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Select committee: Housing, Communities and Local Government Committee

5th Special Report - The Funding and Sustainability of Local Government Finance: Government Response

Published 21 October 2025

Housing, Communities and Local Government Committee The Funding and Sustainability of Local Government Finance Report on parliament.uk ↗

At a glance

The government's response

This document responds to 2nd Report - The Funding and Sustainability of Local Government Finance.

This is the government's response, published 21 October 2025.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government accepts the case for reform of local government finance but declines several of the Committee's specific recommendations, setting out its own reforms centred on the Fair Funding Review 2.0 and a multi-year settlement for 2026-27.

  • On council tax, the government "does not accept" the recommendation to devolve full responsibility for setting it to individual councils "at this time", noting that councils already set levels and have discretionary powers over discounts and premiums.
  • On the New Burdens Doctrine, the government says placing it on a statutory footing "would reduce its effectiveness", but it is reviewing and updating the Doctrine.
  • On ringfencing, it intends to bring grants together into "large ringfenced consolidated grants" and to roll suitable grants into the Revenue Support Grant, rather than end ringfencing.
  • On outcomes-based accountability, the final Framework will be published alongside the provisional 2026-27 Settlement, and it expects to use it from April 2026.

Read the government's response ↗ Report an error

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