The Local Government Finance Policy Statement for 2025 to 2026, released by the Ministry of Housing, Communities & Local Government, outlines the central government's strategy to support local authorities in England. This statement highlights the critical role of local government in delivering essential services and addresses the financial challenges they face due to increased demand and costs.
- Additional Funding: The Autumn Budget announced over ￡4 billion in additional funding for local government services. Of this, ￡1.3 billion will be allocated through the 2025-26 Local Government Finance Settlement.
- Targeted Support: The Settlement will focus on areas with greater need and demand for services, using deprivation as a proxy. This includes increased funding for social care and the introduction of a new 'Recovery Grant'.
- Social Care: An additional ￡680 million will be provided via the Social Care Grant, and a new Children’s Social Care Prevention Grant worth ￡250 million will be introduced.
- Housing: An immediate cash injection of ￡500 million into the Affordable Homes Programme will support the delivery of up to 5,000 new social and affordable homes. Additionally, ￡450 million will be provided through the Local Authority Housing Fund.
- Road Maintenance: An additional ￡500 million will be allocated for local roads maintenance.
- Special Educational Needs and Disabilities (SEND): Additional funding will be provided to support services for children with special educational needs and disabilities.
- Homelessness Services: Increased funding to tackle homelessness and support rough sleepers.
- Devolution and Local Growth: The government will continue its programme of devolution, encouraging local authorities to form combined authorities to drive economic growth. This includes the upcoming English Devolution White Paper, which will make it easier to form combined authorities and deepen the powers available to them.
- Local Government Finance System: Plans to update the local government finance system will begin in 2026-27 to ensure a fairer distribution of resources. This includes consulting on and implementing an up-to-date assessment of needs and resources.
- Social Rent Settlement: A consultation on a new 5-year social rent settlement will provide councils with long-term planning certainty while ensuring protections for existing and future social housing tenants.
- Local Audit and Scrutiny: An overhaul of local audit, scrutiny, and standards will ensure high standards of probity and value for money. This includes consulting on strengthening the standards and conduct framework for local authorities in England.
- Standards Framework: The government will consult on strengthening the standards and conduct framework for local authorities in England.
The statement underscores the government's commitment to working in partnership with local authorities to rebuild and improve local services. It acknowledges the financial challenges ahead and emphasizes the need for economic growth to support sustainable public services.
This detailed summary should give you a comprehensive understanding of the key points from the Local Government Finance Policy Statement for 2025 to 2026. If you need further details or specific sections expanded, feel free to let me know!
