The funding settlement for councils announced by Michael Gove will not not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year.
Yesterday the Government announced it plans to increase funding for local government councils by £4 billion pounds to £64 billionto address inflation-driven pressures, after cities Birmingham and Nottingham effectively declared bankruptcy.
The settlement for 2024-25 marks a 6.5% rise from 2023-24, the government said in a statement on Monday in an attempt to ease the pressures on councils which provide local services before a national election expected next year.
“We recognise they are facing challenges and that is why we have announced a 64 billion-pound funding package to ensure they can continue making a difference, including through our combined efforts to level up,” levelling up minister Michael Gove said.
“Levelling up” refers to a plan to create economic opportunities across the whole country, not just in the wealthy southeast.” he added
Cllr Shaun Davies, Chair of the Local Government Association, said:
“The funding uplift announced by the Government today assumes that all councils will increase their council tax bills by the maximum allowed in 2024/25. This means councils are again left facing the difficult choice about raising bills to bring in desperately needed funding.
“Today’s settlement does not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year. Councils in England continue to face a funding gap of £4 billion over the next two years as today’s announcement does not change the funding gap facing councils this year and next.
“It is therefore unthinkable that government has not provided desperately needed new funding for local services in 2024/25. Although councils are working hard to reduce costs where possible, this means the local services our communities rely on every day are now exposed to further cuts.
“No council is now immune to the growing risk to their financial sustainability. The Government urgently needs to address the growing financial crisis facing councils and come up with a long-term plan to sufficiently fund local services through multi-year settlements.”
