Council leaders have welcomed the announcement of £1.3bn of funding in the Budget but called for clarity on protection from increases to employer National Insurance contributions.
The additional funding means local government budgets for 2025-26 will increase to £14.3bn, providing a real-terms boost in total core spending power of around 3.2%.
However, the employers' National Insurance rise is expected to swallow up approximately £270m of the funding, with minimum wage increases also impacting on budgets.
Cllr Louise Gittins, chair of the Local Government Association, welcomed measures such as Right to Buy reform, funding for potholes, childcare, and affordable housing, but called for ‘explicit clarity’ on whether councils will be protected from the NI increases.
Cllr Tim Oliver, chairman of the County Councils Network, added that the £1.3bn fails to close the local government funding gap, and warned that local authorities will incur ‘significant additional expense’ due to the increase in the National Living Wage.
‘Councils will have little choice but to raise council tax and still will need to take difficult decisions over services to balance their budgets,’ he said.
Cllr Jeremy Newmark, the District Councils’ Network finance spokesperson, said measures in the Budget were ‘important staging points’ on the way towards reforming and protecting council services.
He added that he looked forward to working in partnership with ministers in the run-up to the Local Government Finance Settlement and Spending Review.
Cllr Claire Holland, chair of London Councils, also welcomed the £233m of extra funding to prevent homelessness.
‘We went into this Budget warning of a homelessness emergency that is devastating Londoners’ lives and pushing boroughs to the brink of bankruptcy,’ she said.
‘The measures announced by the Chancellor to support local homelessness services and boost housing growth are hugely welcome, alongside the additional investment in SEND and social care.’
Autumn Budget: What does local government need to hear?
