Government plans for councils spending have been mapped

Bringing it home for Christmas, Michael Gove has revealed all local authorities will experience a 3% increase in spending for the next financial year.

Ahead of the provisional Local Government Finance Settlement, which is due to be laid out in a letter to parliament today, UK ministers have highlighted the principles for the next two years in a government ‘blueprint’ for spending.

The policy statement comes amid increasing criticism over how late the finance statement is, and the difficulty it causes for local government budgets.

Mr Gove has said: ‘We know these are challenging times for local authorities across the country, but councils have long called for greater clarity over their finances and the plan we have published [helps] deliver that.

‘It’s essential that we protect vital services while giving councils the flexibility they need to respond to local need.

‘We are making sure this can happen by delivering a significant spending boost for core services and billions for social care.’

Additionally, Local Government Minister Lee Rowley told the MJ magazine, councils can now begin to plan their budgets for the next financial year and consider their approach to 2023.

Mr Rowley said: ‘Nothing in this life is ever perfect and funding has often been challenge’, however he added, ‘The councils which have best stayed ahead of the reality of the long-term funding landscape in which we are operating are those which have tended to embrace and reform and change.’

As well as increasing councils spending budgets, the Institute for Fiscal Studies (IFS) have said council’s core spending power is set to increase by around 11% over the 2022-23 and 2023-24 financial years.

The IFS’s analysis of the policy statement said grant funding from the government will now rise from £54.1bn in 2022-23 to around £59bn in 2023-24 and £63bn in 2024-25. As a result of this, IFS states that in contrast to other public services, councils can except two years of above inflation rises in their spending power of around 5.4 and 5.8%.

However, the organisation has warned that as inflation continues to rise, the amount councils will receive from the government could be undermined in the coming years.  

Photo by Braňo