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

To ask the Secretary of State for Housing, Communities and Local Government, whether he is considering a 4% minimum annual increase in Core Spending Power for local authorities.

This Spending Review provides over £5 billion of new grant funding over the next three years which includes £3.4 billion of new grant funding which will be delivered through the Local Government Finance Settlement within financial years 2026-27 to 2028-29. The £3.4 billion, when taken together with a 3% core council tax referendum principle and a 2% adult social care precept, results in a 2.6% real terms average annual increase in Core Spending Power over the Spending Review period. We expect that the vast majority of councils with social care responsibilities will see their Core Spending Power increase in real terms over the multi-year Settlement and by 2028-29 and that the 10% most deprived authorities will see a significant increase in their Core Spending Power per head compared to the least deprived.

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 others 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 using 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.

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.