Councils in England will have access to a share of £54.1bn in funding for the coming financial year including more than £1bn of additional money for social care.
The government said this is the largest cash terms increase in grant funding in 10 years, providing the stability they need to build back better.
This includes a one-off 2022/23 Services Grant worth £822m for councils to spend as they see fit on local priorities.
The measures confirmed by Levelling Up Secretary, Michael Gove, will allow councils to maintain and improve the services they provide, while protecting residents from excessive council tax increases, the government said.
Last week’s publication of the Levelling Up White Paper set out the government’s ambition to transform the country.
Councils are intended to be at the forefront of this ambition, with the government saying they are making sure that they have the resources to deliver the vital services their communities need.
Commenting, Secretary of State for Levelling Up, Michael Gove said:
“Levelling up can only succeed if our local partners have the powers and resources they need to help transform their communities.
“Today’s £54.1bn settlement represents a real terms increase of more than 4.5% from last year and will make sure councils can improve local services, protect vulnerable people and build back better from the pandemic.”
The final finance settlement includes:
- More funding for social care: The government is making more than £1bn of additional funding available for social care, ensuring councils can improve conditions for carers and those in need. In addition, £162m will be allocated to help councils and the social care sector prepare for adult social care reform, ensuring the system is fit for future generations.
- Protecting taxpayers from excessive council tax rises: Residents will continue to have the final say over excessive council tax increases. From next year, the amount council tax can be increased without a vote has been reduced to 2%, plus 1% for councils with adult social care responsibilities, with additional flexibilities for some authorities.
- New Homes Bonus: £556m has been allocated to English councils in 2022/23. This brings the total amount of funding awarded under the New Homes Bonus to £10bn, which has seen over 2.3 million additional homes being built, of which more than 560,000 are affordable. Last year, the government published a consultation on the future of the New Homes Bonus and sought views from the sector on a range of issues, from how effective the current scheme has been, to potential changes to how payments are made, ensuring the funding reaches the places that need it most. Our response to the consultation on the New Homes Bonus will be published in the coming months.
- Lower Tier Services Grant: Providing £111m to councils with responsibility for services such as homelessness, planning, recycling and refuse collection and leisure services. The funding floor has been updated so that no council will have less funding available in 2022/23 than this year.
- Continued support for rural areas: The government recognises that there are often additional cost pressures of serving dispersed populations in rural areas. They said this is why they are maintaining the Rural Services Delivery Grant at £85m.
- Business Rates Retention pilots: Continuing the 100% Business Rates Retention pilots in Cornwall, Greater Manchester, Liverpool, West Midlands and the West of England, as well as the 67% Business Rates Retention for London councils, enabling them to control more of the money they raise locally.
- Revenue Support Grant: An uplift to the Revenue Support Grant in line with inflation, worth over £72m.
