Extra Government Funding for Local Councils

Published on: 30 Jan, 2024
Updated on: 30 Jan, 2024

By Chris Caulfield

local democracy reporter

Additional government funding for local councils will “go some way” towards easing the pain felt by local authorities struggling to balance their books – although calls remain for greater reform.

Communities Secretary Michael Gove announced that English councils would get a share of £500 million for their social care grant, and a share of £100 million increase in core spending power.

Communities Secretary Michael Gove

It comes amid a backdrop of councils facing difficult financial times, with Woking declaring itself effectively bankrupt, Runnymede being served a Best Value Notice, and Surrey County Council admitting it would need to make serious cuts and increase tax by the maximum allowable in order to have a legal budget.

Further pressure has come after a letter from MPs pushed for the extra cash ahead of this year’s general election.

In a written statement on Wednesday, January 24, Mr Gove said the extra money would enable councils to provide “crucial social care services for their local communities, particularly children”.

Councils have also been told their funding guarantee, the minimum annual increase available to all authorities would increase by a percentage point, from 3 per cent to 4 per cent, something Mr Gove described as a “key ask” from district councils.

He said: “We have listened to councils across England about the pressures they’re facing and have always stood ready to help those in need.

“This additional £600 million support package illustrates our commitment to local government.

“We are in their corner, and we support the incredible and often unsung work they do day-to-day to support people across the country.”

Tim Oliver – Leader of Surrey County Council

Surrey County Council leader, Tim Oliver (Con, Weybridge), is also the chair of the network of county councils.

He said the announcement would “go some way to easing the pressures and in particular address the escalating demand and costs of delivering social care and home-to-school transport.

“Whilst this extra funding will undoubtedly help us protect valued frontline services, councils, of course, still face difficult decisions when setting their budgets for 2024/25.”

He called for the reformation of local government finance and how services were provided adding: “Councils require a long-term financial settlement to enable us to plan for, and meet, the demand from our growing elderly populations and the more complex needs of residents requiring social care.

“This must be coupled with a comprehensive reform programme to bring in line the funding envelope available to enable us to deliver effectively our statutory responsibilities.”

The majority of the funding is ringfenced for social care – this is a service usually provided by upper-tier local authorities – in Surrey it is provided by Surrey County Council.

The £500 million pounds announced by the government is to cover all upper-tier local authorities in England.

According to Surrey County Council’s most recent set of accounts, it alone spent £727 million on Children, Families, Lifelong Learning and Culture, and a further £680 million for adult social care.

For smaller local authorities such as Woking Borough Council, which has debts of about £2 billion, the extra funding from central government works out to be about £152,000 a year, the Local Democracy Reporting Service understands.

Additionally, the four per cent announced increase is below the current rate of inflation which at the time of writing was 4.2 per cent – meaning the offer, while better than before, is still a net loss for local authorities.

Cllr Will Forster

Deputy Leader of Woking Borough Council, Will Forster (Lib Dem, Hoe Valley) said: “We welcome this additional financial support announced by the government yesterday. This goes some way to filling the funding gap in local government.

“The majority of this funding will go towards meeting the increasing cost of delivering adult social care by county and unitary councils, whilst we expect the remaining funding to go towards district and borough councils, like ourselves, to alleviate the impact of rising inflation and increased demand on our core services.”

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