Final Local Government Finance Settlement to provide fairer funding

The government has announced an extra £440 million to be made available to councils through the Final Local Government Finance Settlement.

Around £78 billion is being made available for councils across England through the fund, along with a top-up to the Recovery Grant for areas hit hardest by historic cuts.

A new evidence-based approach will be used that recognises local need and the true costs of providing services in deprived areas.

Councils most impacted by historic funding cuts will receive targeted investment through a £440 million Recovery Grant uplift £2.6 billion will be made available through the Recovery Grant by 2028-29.

Councils have already been told how much they can expect to receive over the next three years as part of the first multi-year finance settlement in a decade.

This announcement brings the total new investment in local services to over £5.6 billion over the next three years and also provides an additional £740 million in funding between the provisional and final settlement. 

Through a £39.6 million boost to mayoral capacity funding, local leaders will also get extra money to improve transport, build homes and create jobs.

Councils will have 90 per cent of their historic SEND-related deficits up to 2025-26 written off.

Furthermore, people at risk of homelessness will receive more help to find suitable, stable housing, with a £272 million uplift bringing total homelessness funding to over £2.7 billion. 

Secretary of State for Housing, Communities and Local Government, Steve Reed said: "We inherited a system where the communities that needed the most support were left behind. Today we’re turning the page. 

"This £78 billion settlement is about real change – potholes filled, streets kept clean, older people looked after, and young people having somewhere to go in their area.  

"And with an extra £440 million for areas hardest hit by historic cuts, we’re making sure every community gets its fair share."

Minister of State for Local Government and Homelessness, Alison McGovern MP said: "We promised to reconnect funding to deprivation — and this final Settlement delivers on that promise. With more new funding, we’re giving councils the certainty they need to plan ahead and transform services.  

"Our purpose is to support families, tackle homelessness before it happens, and finally giving communities worst affected by historic cuts their fair share.  That’s how we rebuild this country.”