Councils in England set to receive £69 billion in 2025-26 funding, but concerns remain.
Local councils in England will have access to more than £69 billion in funding for the 2025-26 financial year, according to a government announcement on Monday. The Local Government Finance Settlement, unveiled by Angela Rayner, is part of an effort to stabilise local government finances amid ongoing economic pressures.
Figures from the Ministry of Housing, Communities and Local Government reveal that the Core Spending Power of local councils— the total amount available to fund essential services—will rise by over 4% compared to last year, averaging £154 million per local authority. However, the funding varies significantly between councils. Birmingham is set to receive the highest total amount, with a Core Spending Power of £1.47 billion, while South Staffordshire and Broadland have the lowest per-dwelling funding at £201.4 each.
The funding package consists of several key components. The Settlement Funding Assessment (SFA)—which includes the Revenue Support Grant and Baseline Funding Level—and Council Tax Requirement together make up a significant portion of council budgets. On average, councils across the country will receive £79 million from Council Tax and £40 million from SFA funding. Birmingham again leads in both categories, with £533.6 million in SFA funding and £510.9 million from Council Tax, while Melton receives the lowest SFA allocation at just £1.51 million.
Additional grants, including compensation for under-indexing the business rates multiplier, the Better Care Grant, the Social Care Grant, and the Recovery Grant, account for 18.8% of total available funding.
Despite the increase in funding, concerns remain that councils may struggle to keep pace with rising costs. Louise Gittins, Chair of the Local Government Association, welcomed the extra money but warned that it “still falls short of what is desperately needed” to cover growing financial pressures, particularly in social care and public services.
With local authorities facing ongoing demand for services and economic uncertainty, the debate over whether this funding increase is enough is set to continue.
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The map below was created using our ‘Local Authority Districts 2024’ template, with data from the Ministry of Housing, Communities and Local Government. The visualisation maps statistics on the local government finance settlement 2025-2026. This is categorised by type of funding.
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