Press release

Fairer funding for councils across the country in major reform

An overhaul of the outdated and complex council system will bring fairer funding, more stability and improve lives of people across the country바카라 사이트�바카라 사이트�

• From: Ministry of Housing, Communities and Local 바카라 사이트 and Jim McMahon OBE MP
• Published: 20 June 2025

• An overhaul of the outdated and complex council system will bring fairer funding, more stability and improve lives of people across the country바카라 사이트�바카라 사이트�聽

• New place-based, focussed formulas to target money to places most in need, replacing decade old data and outdated funding system聽

• Streamlined funding and multi-year settlements introduced in drive for council efficiency and improved public services as part of the Plan for Change바카라 사이트�聽

聽The local government funding system will be reformed to get councils back on stable footing, improve the lives for people across the country and deliver essential funding for better public services, delivering on the Plan for Change. 바카라 사이트�聽

聽Working hand-in-hand with the sector, proposals will create a fairer system that reflects areas바카라 사이트� changing needs, differing delivery costs and the level of demand on front-line services that people rely on such as social care.聽聽

For too long, many residents have seen council tax hikes despite declining local services. This will be tackled by overhauling the decade old, outdated funding methodology currently used to fund councils, so allocations are made based on the latest and best available data and recognise the areas where demand for council services is greatest. As a result of these changes, left behind places will on balance see larger increases in available income.聽

聽It will also scrap existing competitive bidding processes councils often have to go through for small pots of money, simplifying the 300 grants that already exist to slash time waste in councils and Whitehall and prioritise value for taxpayer cash. This could help cut the almost 90,000 document pages historically required as part of the competitive processes. 바카라 사이트疶his would be almost the equivalent of the drive from Birmingham to Wolverhampton, if laid end to end.바카라 사이트�聽

聽Targeting money to places in need, prioritising prevention and reforming public services as part of the government바카라 사이트檚 mission-driven agenda to deliver for working people, tackle poverty and drive growth across the country as part of a decade of renewal. These changes will deliver the Fair Funding Review launched by the previous government in 2017 but never actioned.聽聽

Minister for Local 바카라 사이트 and English Devolution, Jim McMahon OBE said:

We inherited a local government sector on its knees바카라 사이트攃ouncils pushed to the financial brink, facing rising demand, and working people not receiving the quality local services they rightly deserve.聽

There바카라 사이트檚 broad agreement across council leaders, experts, and parliamentarians that the current funding model is broken and unfair. This government is stepping up to deliver the fairer system promised in the 2017 Fair Funding Review but never delivered.聽

These reforms are urgently needed to put councils on a stable footing and ensure better services for residents 바카라 사이트� especially working people 바카라 사이트� right across the country. It바카라 사이트檚 a key part of our Plan for Change to deliver the outcomes people deserve.

聽It follows last week바카라 사이트檚 additional funding announced in the Spending Review and the 2025-26 Local 바카라 사이트 Finance Settlement that saw 拢69 billion allocated for local authorities.聽聽

The eight-week consultation launched today sets out how the government will make funding allocations fairer for councils of all sizes and across all parts of England. 바카라 사이트�聽

• Rural areas: proposals to recognise the remoteness of areas and account for the additional costs in delivering services in rural places; 바카라 사이트�聽

• Urban areas: making sure that deprivation is properly recognised in the 바카라 사이트榓ssessment of need바카라 사이트� of councils, so that the vital services that support the poorest in communities are properly funded;바카라 사이트�聽

• Social care: updating the formula used to work out funding for local authorities that provide adult social care so it properly reflects the demands of our ageing population. We are also reforming children바카라 사이트檚 social care and Special Educational Needs and Disabilities (SEND), including ensuring councils are properly funded to help support and protect the most vulnerable children. While these reforms are underway, the Dedicated Schools Grant Statutory Override, which helps councils manage SEND costs, will stay in place until the end of 2027/28 and in addition we will introduce a bespoke formula to recognise Home to School transport costs; 바카라 사이트�聽

• Resetting the business rates retention system: so that it incentivises local authorities to help their local economies grow by better matching the system to local need; and 바카라 사이트�聽

• Consolidating billions in grant funds: so that councils no longer waste time or money bidding for small pots of funding, replacing it with a streamlined grant system that promotes prevention and public service reform, and reflects key missions in the Plan for Change. The Department estimates councils shelled out almost 拢70million in administrative costs and consultancy fees on bidding for the Levelling Up Fund and other bidding schemes.바카라 사이트�聽

聽The first multi-year settlement in a decade will also be brought forward in 2026-27 to finally provide council leaders with security and certainty over their finances, ending short-termism to deliver meaningful change to their communities.바카라 사이트�바카라 사이트�聽

These reforms, together with the additional funding announced through the spending review will ensure the vast majority of upper-tier councils will see real-terms increases in available funding over the multi-year settlement.바카라 사이트�聽

Further information聽聽

Minister McMahon바카라 사이트檚 Written Ministerial Statement can be read

The consultation can be viewed on Gov.uk here and will be open for 8 weeks바카라 사이트�聽

The response to the earlier consultation can be viewed on Gov.uk here.聽

The government is proposing a transitional approach to the new funding system over a three year period, to enable local authorities to plan for changes.바카라 사이트�바카라 사이트�聽

No allocations for local authorities have been announced or confirmed yet. This will be announced in the provisional Local 바카라 사이트 Finance Settlement 2026-27 later this year 바카라 사이트� the same approach as with previous years.바카라 사이트�바카라 사이트�바카라 사이트�聽

Building on action already taken in the 2025-26 Local 바카라 사이트 Finance Settlement, today바카라 사이트檚 announcement to streamline the grant system, local leaders will have more flexibility to spend on their voters바카라 사이트� priorities, drive efficiency in councils and deliver better value for taxpayer money. 바카라 사이트�聽

Accountability and transparency over public spending will be bolstered through a greater focus on outcomes that reflect voters바카라 사이트� priorities.바카라 사이트�바카라 사이트�聽

Dr Ryan Swift, research fellow at IPPR North said:聽

바카라 사이트淭he last government implemented budget cuts that hammered local councils, especially in the most deprived areas, meaning fewer and poorer services for local people.聽

바카라 사이트淏ut today things are looking up. Upping core funding, introducing multi-year funding settlements and ending competitive bidding processes will provide more stability so councils can plan for the future and improve.聽

바카라 사이트淭oday바카라 사이트檚 announcement is a step along the road to repairing council finances. Recognising demands on local services from factors like demographics and deprivation are crucial so that councils can deliver the services that people expect and deserve.바카라 사이트澛�

Cllr Sir Stephen Houghton, Chair of the Special Interest Group of Municipal Authorities (SIGOMA) said:聽

바카라 사이트淭he significant reforms proposed by the government will deliver a fairer and more sustainable system and are a major and positive step forward.聽聽

바카라 사이트淎 decade of disproportionate cuts, outdated formulas and short-term settlements have left our members with shrinking resources, struggling to meet rising demand. It is therefore very welcome that there will now be a focus on delivering a funding system that supports바카라 사이트痶he most deprived areas. This will build on the important work of the Recovery Grant.聽聽

바카라 사이트淪implifying the grant system and delivering a long-overdue multi-year settlement will bring about much-needed stability and certainty for councils. The government바카라 사이트檚 close engagement with the sector is testament to the reset in the relationship with local government, and we look forward to responding to the consultation and continuing to engage with the department.바카라 사이트澛犅�

Cllr John Merry, Chair of Key Cities, said:바카라 사이트�

바카라 사이트淐ouncils are central to national renewal. They must be valued, properly funded, and adequately resourced to deliver essential services - from social care to affordable housing - which are under increasing strain. Key Cities바카라 사이트� inaugural survey of council leaders found that many are already turning to financial reserves and service redesigns, with asset sales, salary reductions and redundancies under active consideration.바카라 사이트�聽바카라 사이트�聽

바카라 사이트淎s the largest and most diverse urban network outside the capital, with 24 members, we have long championed the need for a funding reset: one that empowers local authorities and channels resources to the communities that need them most, driving inclusive national growth.바카라 사이트�聽바카라 사이트� 聽 바카라 사이트淲hat바카라 사이트檚 needed now is long-term funding certainty, replacing piecemeal interventions and enabling councils to focus on meeting local needs. Key Cities welcomes the launch of the 바카라 사이트바카라 사이트檚 second consultation on local government funding reform. We remain committed to working with the 바카라 사이트 to shape a brighter future for our communities.바카라 사이트�

Published 20 June 2025