England’s local councils are set to receive a significant funding increase of nearly £78 billion to support vital services following a major reform of council tax. This boost will result in a more than 23% rise in councils’ core spending power compared to the previous year, enabling them to cover essential services such as waste collection, housing, and children’s services. Notably, the most disadvantaged 10% of councils will experience a 24% per capita funding rise in efforts to promote greater fairness across the country.
According to government officials, this financial injection will empower councils to reinstate services like libraries, youth programs, sanitation, and community centers. The new measures include a 3% annual cap on council tax increases, with an additional 2% allocation specifically for adult social care.
While councils are restricted to the set limits for tax hikes, certain councils with historically low tax rates, including Wandsworth, Westminster, Hammersmith and Fulham, City of London, Kensington and Chelsea, and Windsor and Maidenhead, will have the freedom to raise taxes above the capped amount to compensate for the redistribution of government funds to more economically challenged areas.
This funding boost marks the first multi-year settlement for local councils in over ten years, offering three years of financial stability. Steve Reed, the Local Government Secretary, emphasized that this initiative aims to reverse a decade of budget cuts and enable local leaders to reinvest in crucial community services. Additionally, to support the establishment of a National Care Service, approximately £4.6 billion extra funding will be allocated for adult social care by 2028-29, including a £500 million fund to enhance care worker wages.
Furthermore, the government plans to implement significant reforms in children’s social care, with a historic investment of £2.4 billion over the multi-year period. As part of the strategy to promote local growth and homeownership, councils will retain all additional council tax revenue generated from new residential properties. Alison McGovern, the Minister of State for Local Government and Homelessness, highlighted the importance of directing funding towards areas of greatest need to address systemic issues of deprivation and inequality.
By aligning funding with areas of deprivation, the government aims to equip local regions with the necessary resources to foster opportunities, support families, and rebuild essential community services. The overarching goal is to create a more equitable society where everyone has the chance to thrive.
