Local Government Services: Finance
(asked on 7th January 2025) - View Source
Question to the Ministry of Housing, Communities and Local Government:
To ask the Secretary of State for Housing, Communities and Local Government, pursuant to the Answer of 27 December 2024 to Question 20641 on Local Government Services: Rural Area, what the (a) cash (b) real terms and (c) proportional change in core spending power will be in each individual type of (i) rural and (ii) urban area according to the classification methodology used by the Department for Environment, Food and Rural Affairs in the (A) 2024-25 and (B) 2025-26 financial year.
The provisional Settlement for 2025-26 makes available £69 billion for local government, which is a 3.5% real terms increase in councils’ Core Spending Power on 2024-25. The final Settlement will increase further, to incorporate the £515 million of funding announced for National Insurance Contributions.
This government is absolutely committed to tackling the issues that matter to rural communities. Places with a significant rural population (encompassing both authorities classed as predominantly Rural, and Urban with Significant Rural) will on average receive around a 5% increase in their Core Spending Power next year, which is a real terms increase. No council will see a reduction – and new funding will be available to rural areas in 2025-26 through guaranteed EPR payments.
The cash, percentage, and real terms changes in Core Spending Power for rural and urban authorities, according to the classification methodology used by the Department for Environment, Food and Rural Affairs, and published by the Office for National Statistics, are found in the table below (please see below the table for further explanatory information).
Table 1. Provisional local government finance settlement 2025-26,core spending power by Rural/Urban classification
Rural/Urban Classification 2011 | Core Spending Power 2024-25 (£ million) | Core Spending Power 2025-26 (£ million) | Cash increase (£ million) | % change CSP 2023-24 to 2024-25 | % real change CSP 2024-25 to 2025-26 |
Predominantly Rural | 8,725 | 9,151 | 426 | 4.9% | 2.4% |
Urban with Significant Rural | 11,194 | 11,844 | 650 | 5.8% | 3.3% |
Predominantly Urban | 36,067 | 38,564 | 2497 | 6.9% | 4.4% |
Unclassified - no Rural/Urban classification available | 8,996 | 9,326 | 330 | 3.7% | 1.2% |
Total England | 64,982 | 68,884 | 3902 | 6.0% | 3.5% |
Explanatory information and sources
- Core Spending Power has been grouped using DEFRA’s Rural/Urban Classification (RUC) 2011 dataset, further information can be found here: 2011 Rural Urban Classification - GOV.UK. There are 43 unclassified authorities which are not included in the RUC dataset. Of these, 32 are fire authorities or the GLA and 11 are authorities which have undergone restructuring since the latest available RUC publication.
- Core Spending Power data: Provisional local government finance settlement: England, 2025 to 2026 - GOV.UK.
- For the financial year 2025-26 real-terms calculation we use the GDP deflator: Gross Domestic Product (GDP) - Office for National Statistics.
Further information on the provisional local government finance settlement, including the increases in grant for rural and urban areas can be found in the provisional local government finance settlement core spending power publications. These have now been updated to include local authority Rural/Urban classifications and can be accessed via the following link: https://www.gov.uk/government/publications/core-spending-power-table-provisional-local-government-finance-settlement-2025-to-2026.