Billions available for councils to build back better

Councils in England will receive £53.9 billion in funding for the coming financial year, including more than £1 billion of additional funding for social care.

The funding set out by the Department for Levelling Up, Housing and Communities is expected to enable councils to continue to deliver vital services and look after the most vulnerable in their communities. It will also support councils to play a significant role in the government’s transformative levelling up agenda as the country builds back better from the pandemic.

The funding package represents the largest cash-terms increase in grant funding for 10 years and makes an extra £3.5 billion available compared to 2021-22, including a grant worth £822 million for councils to spend as they see fit to best meet local needs.

To protect residents from excessive council tax increases, from next year, the amount council tax can be increased by without a vote has been reduced to two per cent, with an extra one per cent for councils with adult social care responsibilities.

Levelling Up Secretary Michael Gove said: “Councils continue to deliver for their communities and have a major role to play in our central mission of levelling up the country. Today’s funding package represents a real-terms increase from last year’s settlement and will make sure councils can improve vital frontline services, support vulnerable people and protect residents from excessive council tax rises as we build back better form the pandemic.”

The Provisional Finance Settlement also includes: £554 million for English councils in 2022/23 under the New Homes Bonus; £111 million to councils with responsibility for services such as homelessness, planning, recycling and refuse collection and leisure services, under the Lower Tier Services Grant; and continuing the 100 per cent Business Rates Retention pilots in Cornwall, Greater Manchester, Liverpool, West Midlands and West of England and 67 per cent Business Rates Retention for London councils, enabling them to control more of the money they raise locally.

The government is committed to ensuring that funding allocations for councils are based on an up-to-date assessment of their needs and resources. The data used to assess this has not been updated in a number of years, dating from 2013-14 to a large degree, and even as far back as 2000. Over the coming months, DLUHC will work closely with the sector and other stakeholders to update this and to look at the challenges and opportunities facing the sector before consulting on any potential changes.