Provisional local government finance settlement: England, 2025 to 2026
This collection brings together all documents relating to the provisional local government finance settlement for England in 2025 to 2026.
The local government finance settlement is the annual determination of funding to local government. It needs to be approved by the House of Commons.
This collection covers the provisional local government finance settlement for 2025 to 2026 and includes a consultation on the proposals. Following the conclusion of this consultation, the final settlement for 2025 to 2026 will be published and laid before the House of Commons in early 2025.
On 18 December, the government also launched a consultation to seek views on updating how local authorities are funded through the local government finance settlement from 2026-27 onwards.
Provisional settlement 2025 to 2026: consultation
This section contains the provisional local government finance settlement consultation document. The consultation runs for 4 weeks and the government is seeking views by 15 January 2025.
Provisional settlement 2025 to 2026: supporting documents
This section contains useful information for understanding the provisional local government finance settlement for 2025 to 2026, including:
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the draft local government finance report 2025 to 2026
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a key information table for local authorities regarding core settlement allocations
Council tax reports 2025 to 2026
This section contains a draft version of the council tax referendum principles report that will be laid before the House of Commons for approval at the time of the provisional settlement:
- the draft Referendums Relating to Council Tax Increases (Principles) Report 2025 to 2026
Core spending power of local authorities 2025 to 2026
Core spending power is a measure of the resources available to local authorities to fund service delivery. It sets out the funding made available to local authorities through the local government finance settlement. This section has:
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an explanatory note, which sets out the methodology used to calculate core spending power
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an information table, which shows for each local authority: the change in core spending power since last year; core spending power per dwelling; and the component figures which are included in core spending power (council tax, locally retained business rates and relevant government grants)
To note, Core Spending Power figures set out local authorities’ position under 50% business rates retention arrangements, which is the position that applies to most local authorities. Core Spending Power figures have not been amended to reflect authorities with bespoke ‘increased’ business rates retention arrangements (i.e. above 50% retention arrangements).
Business rates retention 2025 to 2026
This section contains useful information for understanding the business rates retention system for 2025 to 2026, including:
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a key information table for business rates pools
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an explanatory note for authorities with increased business rates retention arrangements
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a supplementary table setting out all local authorities’ 50% business rates retention position, for calculation purposes
Provisional settlement 2025 to 2026: social care funding
The provisional local government finance settlement for 2025-26 makes available up to £3.7 billion in additional funding for social care. This section contains:
- an information table which sets out allocations of Social Care Grant funding as part of the settlement
- an information table which sets out the composite grants that have been consolidated as part of the Children and Families Grant. This will not form part of Core Spending Power in 2025 to 2026
- an explanatory note on the methodology underpinning the Children’s Social Care Prevention Grant for 2025 to 2026
- a note on the methodology underpinning the Children’s Services Area Cost Adjustment 2024 which has been applied to the Children’s Social Care Prevention Grant
Provisional settlement 2025 to 2026: New Homes Bonus allocations
The New Homes Bonus is a grant paid by central government to local councils to reflect housing growth in their areas. This section has:
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an information table which sets out New Homes Bonus allocations as part of the settlement
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a calculator which sets out how New Homes Bonus allocations have been determined for each local authority
Provisional settlement 2025 to 2026: further methodology notes
The provisional local government finance settlement for 2024 to 2025 proposes to introduce a new Recovery Grant. The government has also announced an additional £515 million for local authorities, in compensation of National Insurance Contributions. The NICs grant will form part of Core Spending Power at the final settlement only. This section includes methodology notes on the following:
- a technical note on the methodology underpinning the Recovery Grant for 2025 to 2026
- an explanatory note on how funding for National Insurance Contribution pressures will be allocated at the final settlement