Councils get £700m funding boost under revised settlement
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Funding for councils next year will be boosted by more than £700 million for social care and the cost of changes to national insurance, the Government has announced. The provisional local government finance settlement for 2025-26 has been amended to increase funding set out in provisional proposals in November from £1.3 billion to more than £2 billion.
The increase includes a £200 million increase in the social care grant and a further £515 million being made available for the burden councils face due to the increase in employer national insurance contributions. The social care grant will now total £880 million and can be used for both children and adult social care.
The revised provisional settlement for 2025-26 is said to make £69 billion available overall to local government in England, a 6% increase in cash terms and an average 3.5% real-term increase in councils’ core spending power provided in 2024-25. This includes the previously-announced emergency £600 million recovery grant which is made up of repurposed existing grants.
In a written statement, local government minister Jim McMahon revealed the final settlement, which will be confirmed early next year, will incorporate the £515 million of funding for national insurance contributions. This funding will also be available to mayoral combined authorities and distributed following an assessment of authorities’ share of “relevant” net spending on services.
