A new analysis highlighting the “vital role” councils play in the Government’s pledge to reform local services and improve living standards concludes that “impossible decisions” will be required on services people rely without urgent action by the Chancellor.
Announcing the move, Angela Rayner said challenges remained in the Government’s bid “to fix the broken (local government) system we inherited”, and stressed the need to strike a balance between preventing councils experiencing “further financial distress” and the “interests of taxpayers”.
However, sufficiently funding councils in the spending review would enable them to fully play their part in leading local growth priorities and unlock the full potential of their local people, businesses and places.
In this event, councils would collectively face a funding gap of £1.9 billion this year, rising to £4 billion next year in 2026/27, £6 billion in 2027/28 and £8.4 billion in 2028/29.
The overall core spending power provided in financial settlement assumes that all other councils will increase council tax by 4.99% in 2025/26- which is the maximum level permitted without holding a local referendum.