Downing Street

Spending Review: Councils to receive £4.8bn increase in grant funding

Councils across the country will receive an increase of £4.8bn in grant funding, the Chancellor of the Exchequer, Rishi Sunak, announced today in his Budget and Spending Review, the biggest increase in more than a decade.

With total Departmental spending growing by £150bn a year in cash terms by 2024-25, a £90bn real-terms increase, this is the largest real-terms increase in overall Departmental spending for any Parliament this century.

In his speech, he outlined how the government plans to create jobs, improve skills, tackle NHS backlogs, put more police on the streets and build new homes, hospitals and schools, as well as announcing that the public sector pay freeze will be lifted.

On top of this, Mr Sunak announced new fiscal rules to ensure the public finances remain on a sustainable path and lay the foundations for a strong economy for generations to come.

Delivering the Budget and Spending Review in the House of Commons, Mr Sunak said:

“Today’s Budget delivers a stronger economy for the British people.

“Stronger growth, with the UK economy recovering faster than our major competitors. Stronger public finances, with our national debt finally under control. Stronger employment, with fewer people out of work and more people in work.

“Growth up, jobs up and debt down, let there be no doubt, our plan is working.”

It comes as latest figures show that the economy is on track to reach pre-pandemic levels by early next year, with unemployment peaking at less than half of what was initially predicted.

An overview of the Budget and Spending Review is below:

Strong and innovative public services:

The government said that the Budget and Spending Review sets out how delivering real-world improvements to the UK’s day-to-day public services is at the heart of building a strong future economy.

To support pupils and teachers, an additional £4.7bn will be invested in the core schools budget in England, which is above the SR19 settlement for schools in 2022-23, in addition to £1.8bn of new money for education recovery and catch-up over the next three years.

Levelling up the UK:

To deliver on the commitment to level up the whole UK and help ensure people’s opportunities in life are not determined by where they live, today’s announcement includes £5.7bn for London-style transport settlements in English city regions over five years.

This will benefits areas including, Greater Manchester, the Liverpool City Region and the West Midlands, amongst others.

The Spending Review confirms £2.6bn between 2020-2025 for a long-term pipeline of over 50 local roads upgrades, over £5bn for local roads maintenance and funding for buses, cycling and walking totalling more than £5bn in England over the Parliament.

The allocation of the first round of the UK-wide Levelling Up Fund sees £1.7bn of local investment in areas.

On top of this, the first 21 projects will receive funding from the £150m Community Ownership Fund, helping communities across the UK protect and take ownership of their most treasured local community assets.

Building back greener:

Building on the £26bn of capital investment announced for the Net Zero Strategy last week, this Budget and Spending Review brings the total committed by the government since March 2021 for a green industrial revolution in the UK up to £30bn.

It includes £6.1bn to deliver the Transport Decarbonisation Plan by boosting the number of zero emission vehicles, helping to develop greener planes and ships, as well as encouraging more trips by bus, bicycle and foot.

£3.9bn will go towards decarbonising buildings, including £1.8bn to support tens of thousands of low-income households to make the transition to net zero while reducing their energy bills.

Delivering for all parts of the UK:

The government said they will make levelling up a reality across Scotland, Wales and Northern Ireland by providing UK-wide support in critical areas, while also targeting action to meet local needs.

The Spending Review also provides an additional £8.7bn per year to the devolved administrations through the Barnett formula, leading to the highest annual funding settlements since devolution in 1998:

  • The Scottish Government will benefit from a £4.6bn per year funding boost.
  • The Welsh Government a £2.5bn per year funding boost.
  • The Northern Ireland Executive a £1.6bn per year funding boost.
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