Fourteen councils across England are set to share £91 million in government funding aimed at transforming high-cost services, embracing artificial intelligence and reducing long-term dependence on emergency financial support.
The investment, announced on 15 September, is targeted at local authorities currently receiving Exceptional Financial Support (EFS), the government's mechanism for councils facing the most severe financial challenges.
The funding package, worth £91 million over two years, is intended to help councils redesign some of their most expensive services, including adult social care, children's services, temporary accommodation and SEND provision. Ministers say the programme will support local authorities to become more financially sustainable while establishing new approaches that can be replicated across the wider sector.
The funding will be distributed over two financial years, with £41 million allocated in 2026/27 and £50 million in 2027/28.
Several of the funded projects place technology and AI at the centre of service improvement.
In Redbridge, AI-enabled home technology will be deployed to help residents live independently for longer. The system will use connected devices capable of detecting risks such as falls, allowing earlier intervention and potentially reducing pressures on health and social care services.
Meanwhile, Trafford Council will invest in modern digital infrastructure and AI-powered tools designed to make services more responsive and efficient. By creating a single, integrated platform for council information, different teams will be able to work more effectively together, improving support for residents accessing services or reporting issues.
Elsewhere, Stoke-on-Trent is redesigning frontline social work through a new family-focused model intended to keep more families together and reduce the need for costly interventions.
Minister for Local Government, Devolution and Regional Growth, Jim McMahon OBE, said:
“Councils have been under enormous strain from a broken funding system and spiralling demand for services like care and temporary accommodation.
“That’s why we took action from day one to fix the foundations by addressing the causes of those issues, from reforming the outdated local government funding system to tackling homelessness, challenges with children’s services and in the SEND system.
“This targeted support for councils facing the toughest pressures is the next step forward, helping end reliance on emergency funding and providing a blueprint for reform across local government.”
The government says the initiative forms part of a wider programme of local government reform, including changes to funding arrangements and measures aimed at controlling the rising costs associated with homelessness, children's social care and Special Educational Needs and Disabilities (SEND).
The funded initiatives have been developed locally and reflect the specific challenges facing each authority.
Among the schemes receiving support are:
- West Berkshire: Creating a single access route for families seeking support across SEND, Early Help and Children's Social Care, reducing complexity and improving co-ordination between services.
- Brighton & Hove: Piloting closer integration between reablement services and NHS provision to support quicker recovery and reduce reliance on long-term care.
- Haringey: Addressing temporary accommodation pressures through property acquisition, reducing dependency on external providers and supporting more residents into settled housing.
- Bradford: Improving SEND transport provision, educational psychology support and dispute resolution processes while ensuring statutory obligations are met.
Government officials stress that the programme is about more than supporting individual councils.
Lessons learned from the funded projects will be used to identify successful approaches that could be rolled out elsewhere, helping shape future local government reform and ensuring scarce resources are focused where they deliver the greatest impact.
The announcement follows a series of measures introduced over the past two years to strengthen council finances, including the Recovery Grant, Children's Social Care Prevention Grant and Children and Families Grant.
It also follows February's publication of the first multi-year Local Government Finance Settlement for a decade and wider reforms designed to tackle the financial burden of high-cost services.
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