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 (a) potential merits of continuing the Recovery Grant within the Local Government Finance Settlement and (b) the criteria used to determine its future inclusion.

The government introduced the £600 million Recovery Grant in 2025-26 to support those local authorities facing higher need and demand for services, and which are least able to fund their own services through income raised locally.

Following a large number of representations on the importance of this funding, the government confirmed in the local government finance policy statement 2026-27 to 2028-29 on 20 November that we would maintain all existing Recovery Grant allocations from 2025-26 across the multi-year Settlement. The government agrees – after years of funding cuts to local government, in which the most deprived places suffered the most – that the recovery is not over.

We will also provide a Recovery Grant Guarantee to upper tier authorities which were in receipt of the Recovery Grant. This will be capped at £35 million per authority over the multi-year period. These upper tier authorities will see an above real-terms increase, except for where the cap is applied.

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.