GBC to Receive No Additional Money from Announced Settlement

Published on: 28 Dec, 2024
Updated on: 30 Dec, 2024

By Chris Caulfield

local democracy reporter

Surrey councils have received mixed news from central Government after learning their financial settlements, including that for Guildford, will largely remain as before – and on short-term one-year deals.

The Government, which wants to “fix the foundations of local government in 2026-27 and beyond”, has announced the latest rounds of financial settlements for local authorities. It forms part of a council’s budget-setting process as they learn how much money they will have to cover all the services they must provide.

Councils across the county have been under increasing pressure to cut costs under massive reductions in their finances. In the meantime, they have to settle for a stopgap settlement and are being asked to give feedback on their allocations.

Many, such as Woking, Spelthorne and Surrey County Council, have borrowed billions in an effort to reinvest that money and use the returns to pay for services – with varying results.

Guildford Borough Council has said it was unlikely to receive any increase and that its core grant assumed a council tax increase of 2.99 per cent – and that would be cancelled out by a matching reduction in government grant.

Richard Bates

The council’s chief financial officer, Richard Bates, said: “The national average increase in council funding for 2025-26 is six per cent. However, this includes funds raised from an assumed increase in council tax.

“The remaining increase is new grant funding. This has been targeted at councils with social care responsibilities and the highest levels of deprivation.

“Guildford Borough Council will not be receiving any increase in its core funding for 2025-26. This assumes a council tax increase of 2.99 per cent.

“The income that we could raise from this will be cancelled out by a matching reduction in government grant. We will have to meet inflationary and demand pressures on the council from our existing resources.

“The government has promised some compensation to the public sector towards the extra employers’ national insurance burden that was announced in the chancellor’s autumn statement.

“At present, no figures for individual councils have been provided.

“The £515 million national allocation for local government only appears to cover a fraction of our extra NI costs of around £1,000 per employee.

“The finance settlement is again for a single year.

“A consultation has also been launched on a wider review of local government funding, with the intention of implementing changes from 2026-27.

“This is likely to include a multi-year funding settlement, which would help with future budget planning.”

Surrey County Council has said the sums given were in line with its expectations and warned that the “high levels” of efficiencies would need to continue.

Cllr David Lewis, Cabinet member for finance and resources, said: “This settlement is in line with the expectations set in the Budget and the recent policy statement.

“However, councils across the country continue to face a very challenging financial future. Uncertainty on funding into the medium term, coupled with high prices and increased demand, means high levels of efficiencies continue to be required in order to balance budgets.”

Mole Valley District Council is one council that has come out better than anticipated and will no longer have to dig as deeply into its reserves next year because of additional Government grants alongside its core funding.

Its leader, Cllr Stephen Cooksey, said: “The long-awaited provisional local government finance settlement was announced on Wednesday, December 18, and it is suggested there will be no increase to our allocation compared to what we received in 2024/25.

“However, the Government has awarded additional funding to us through the extended producer responsibility scheme to help pay for the cost of collecting and recycling waste and has also awarded additional specific grant funding for our services to homeless people and those at risk of becoming homeless.

“The additional funding is welcome and better than we had anticipated.

“Should this be confirmed by the government when its final financial settlement is agreed in the new year, this additional income would mean using less reserves than previously anticipated to balance our 2025/26 budget.”