Councils in England are to receive an extra £600 million in the financial year 2024/25, of which £500 million will be for adult and children’s social care services.
The funding will trigger an extra £25 million for public services in Wales.
As part of the terms for the extra cash, Levelling Up, Housing and Communities Secretary Michael Gove said councils will be required to produce new ‘productivity plans’ by July, setting out “how they will improve service performance and reduce wasteful expenditure to ensure every area is making best use of taxpayers’ money”.
The LGA has warned that councils in England face a £4 billion funding gap over the next two years. An LGA survey in December found that almost one in five council leaders and chief executives feared they were at risk of issuing Section 114 reports because they cannot balance their budgets.
While the extra funding will help ease some of the financial pressures councils face in 2024/25, they will still need to raise council tax, and many will need to make cuts to local services to plug funding gaps.
Cllr Shaun Davies, LGA Chair, said: “We welcome that the Government has acted on the concerns we have raised and recognised the severe financial pressures facing councils, particularly in providing services to the most vulnerable children and adults through social care services and delivering core frontline services to communities.
“We will continue to work with the Government to achieve a sustainable long-term funding settlement and updated distribution mechanisms, as well as legislative reform where needed, so that local government can play its full part in delivering inclusive prosperity and growth through investment, to support people, places, and the planet.”