Response to the Local Government Finance Settlement

Responding to the provisional Local Government Finance Settlement published today, Lord Porter, Chairman of the Local Government Association, said:

“The recent Budget showed the Government is listening to the LGA’s call for desperately-needed investment in our under-pressure local services, such as roads and social care. We are also pleased that the Government has decided not to increase the New Homes Bonus (NHB) threshold further next year which makes up a considerable part of funding for some councils, particularly shire district authorities and provided some extra funding for rural authorities.

“Next year will continue to be hugely challenging for all councils, who still face an overall funding gap of £3.2 billion in 2019/20. It is therefore disappointing that the Government has not used the Settlement to provide further desperately-needed resources for councils next year.

“Many councils will be forced to take tough decisions about which services have to be scaled back or stopped altogether to plug funding gaps. We must not forget that it is individuals and communities who feel the impact, whether it is through seeing their local library or leisure centre close, roads deteriorate or support for young people, families and vulnerable adults scaled back.

“It is vital that the Government uses the final Settlement next month to provide the further resources needed to protect our local services in 2019/20 before ensuring next year’s Spending Review delivers a truly sustainable funding settlement for local government.

“As the nation continues to face huge uncertainty, it is councils who are getting on with the job of providing the services that matter to our communities. Investment in these local services, and councils’ prevention and early intervention work, is the only way councils can continue to make a positive difference to their residents’ lives. It will also help reduce pressures on the rest of the public sector, save money for the public purse and contribute to the wider prosperity and wellbeing of the nation.”

Annual local government finance settlements

Each year local authorities’ core funding allocations for the forthcoming financial year are announced by Government in the provisional local government finance settlement, usually in December. Following consultation, allocations are confirmed in the final settlement, usually in February.

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