Local government finance settlement confirmed for next year

The local government finance settlement has been confirmed for next year with councils to share £51.3 billion, an increase of £2.3 billion.

Local Government Secretary Robert Jenrick said that the £2.3 billion increase on this year includes access to an extra £1 billion for social care to help support vulnerable adults and children. It is hoped that the funding package gives councils the resources they need to continue to deliver services and support their communities during the pandemic while protecting council taxpayers from excessive increases.

The Ministry of Housing, Communities and Local Government says that it will also enable councils to play a crucial role in our nation’s recovery in helping schools and local businesses to reopen safely and support the most vulnerable.

The announcement also includes confirmation of the final allocations for the £670 million fund to enable councils to continue reducing council tax bills for those least able to pay, helping households impacted financially by the pandemic. This is over and above the usual council tax support available for councils each year.

Residents will have the power to veto excessive council tax rises, with a referendum being required if councils propose raising the tax by two per cent or more, with extra flexibility for some authority types. Councils with responsibility for adult social care will be able to set a further three per cent increase, ring-fenced exclusively for adult social care.

Jenrick will also extend the scheme that compensates councils for income lost during the pandemic from services including car parks, leisure facilities and museums, until June 2021.

He said: “Councils have played a key role during the pandemic by delivering vital services and supporting the most vulnerable backed with over £8 billion of emergency support from government to date.

“Today I am pleased to confirm a £51 billion funding package for next year that increases funding for social care and other vital services by £2.3 billion. We are also giving councils an additional £3 billion boost to the level of Covid support available. This is a fair and generous settlement that gives councils the resources they to continue to deliver important services and support their communities while protecting council tax payers from excessive increases.”