Local Government Finance Settlement: Core spending power increased to £60bn

The final local government finance settlement (2023/24) has been set at £60 billion, the Department for Levelling Up, Housing and Communities has confirmed.

This is a £5.1 billion increase on last year’s settlement (£54.1 billion) and includes including access to the new £2 billion new social care grant. A one-off Funding Guarantee ensures every local authority in England will see at least a three per cent increase in core spending power, assuming 95 per cent of councils will increase council tax by the maximum allowed without referendum.

The government proposed the funding package in December. Levelling Up Secretary Michael Gove said:

"This funding package represents an increase of over 9 per cent for councils on last year, ensuring a fair deal for local government that reflects the vital work councils do to provide key services on which we all rely."

Responding to the final Settlement, Local Government Association chair Cllr James Jamieson said:

“The final settlement confirms an increase in local government core spending power, which will help councils deal with inflationary and other cost pressures they face next year. However, this is based on the assumption that councils will raise their council tax by the maximum permitted without a referendum.

“Many councils are still grappling with significant challenges when setting their budgets and trying to protect services from cutbacks due to the deep underlying and existing pressures they face. It is disappointing that the Government has not acted to provide significant further support to shire district councils, which provide vital services like planning and waste and recycling collection and will see a lower core spending power increase.

“This is the fifth one-year settlement in a row for councils, which continues to hamper financial planning and their financial sustainability.

“Councils want to work with government on a long-term funding plan which ensures they have adequate resources, certainty and freedoms and can deliver world-class local services for our communities. The Government also needs to urgently publish public health grant allocations for this year so councils know how much they can budget for essential services to help keep people healthy throughout their lives, including for treating drug misuse and tackling obesity.”