Councils get £272m boost to housing support in final funding settlement

Mayors will also get extra cash to fund housing as part of the settlement. This includes nearly £100m for supported housing services and almost £40m for regional investment, including delivering more homes.

The government also announced yesterday that it would be writing off 90% of councils’ historic debts relating to special educational needs and disabilities (SEND) support, up to the 2025-26 financial year.

The Local Government Association (LGA), which represents English councils, said this would rescue many councils from the threat of bankruptcy, but stressed that fully writing off current and future deficits related to this area of spend remains “critical”.

Louise Gittins, chair of the LGA, said: “We are pleased the government has announced a significant funding package to tackle 90 per cent of the historic high-needs deficits, which removes the immediate threat of insolvency for many councils.”

She added: “Overall budget-setting will be another hugely challenging task for many councils this year and beyond. It is crucial that government works with councils on reform of key services, including SEND and adult social care.

“Long-term reform of the overall local government finance system is also needed to ensure all councils have adequate funding to meet demand pressures, deliver the services communities expect and help deliver on national priorities.”

The government claimed that the package for councils is “record-breaking”, and highlighted that it includes a new distribution formula based on levels of deprivation.

But ahead of yesterday’s announcement, the LGA warned that a third of councils, surveyed after the provisional settlement was announced last year, believe they will struggle to balance their budgets within the next three years and are likely to need a government bailout. 

Responding to the final settlement, the District Councils’ Network (DCN), which represents around half of English councils, said it contains “good news” for district councils.

The group said a new adjustment support grant would mean no council would see a drop in its core spending power in 2026-27, and talks are underway to extend this over the two years after that.

However, they also said that district councils on average face a real-terms cut to funding that will hit authorities in remote and rural areas the hardest.

Jeremy Newmark, finance spokesperson at the DCN, said the group will ask the government to provide support to councils beyond the settlement, including reviewing fees and charges.

He said: “Inevitably, the funding redistribution reflected in the final settlement has created winners and losers.

“Some district councils will benefit from meaningful funding boosts. Others will be forced to rely on transitional arrangements to help them balance their budgets.

“It is clear that district and unitary councils, especially in more remote and rural areas, will struggle to preserve the full range of services that residents need and value.”