Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, whether his Department has made an assessment of the potential differential impact of the local government finance system on local authorities.

Answered by Alison McGovern - Minister of State (Housing, Communities and Local Government)

On 20 November the government published the Local Government Finance Policy Statement which sets out our plans for the 2026-27 to 2028-28 multi-year Local Government Finance Settlement. These plans represent a fairer system for all authorities which recognises the variation in demand and the cost of providing services in different places and the vast majority of social care authorities will receive a real terms increase.

The government wants to move decisively to a reformed system, but we have heard clearly that we need to implement funding reform in 2026-27 with transitional arrangements to allow time to adjust. We will therefore phase in allocations over the multi-year Settlement and protect the income of authorities which would see losses from funding reform. We will use a range of funding floor levels appropriate to specific groups of authorities’ circumstances. Further details can be found here: Local government finance policy statement 2026-27 to 2028-29 - GOV.UK .

These changes will not fix the challenges facing local government overnight. Tough decisions are required on all sides, but these proposals are a fundamental step to improving the sustainability of local government in the years to come and will allow councils to focus on service delivery and transformation.

We will publish provisional local authority allocations at the upcoming provisional multi-year Settlement in December. Proposals and allocations will be subject to consultation and the usual Parliamentary process.