Council tax: 'Difficult choice' facing councillors after finance settlement, says leader

It comes after the Government on Monday announced a funding package for councils across the country worth over £64 billion to support local authorities in England to deliver frontline services.

Councils will be able to increase council tax by up to three per without a local referendum with a further two per cent for those responsible for adult social care services, which includes both Shropshire and Telford and Wrekin.

Councillor Shaun Davies, the leader of Telford & Wrekin Council also chairs the Local Government Association, which represents authorities across the country.

He said: “The funding uplift announced by the Government today assumes that all councils will increase their council tax bills by the maximum allowed in 2024/25.

"This means councils are again left facing the difficult choice about raising bills to bring in desperately needed funding.

“Today’s settlement does not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year.

"Councils in England continue to face a funding gap of £4 billion over the next two years as today’s announcement does not change the funding gap facing councils this year and next.

“It is therefore unthinkable that government has not provided desperately needed new funding for local services in 2024/25.

"Although councils are working hard to reduce costs where possible, this means the local services our communities rely on every day are now exposed to further cuts."

As councils face the prospect of not being able to set balanced budgets, Councillor Davies added that he thinks no council is now immune to the growing risk to their financial sustainability.

He said: "The Government urgently needs to address the growing financial crisis facing councils and come up with a long-term plan to sufficiently fund local services through multi-year settlements."

The Government says the provisional local government finance settlement makes available almost £4 billion more funding for councils in England in 2024-25, an increase of 6.5 per cent on 2023-24 - an above inflation rise in recognition of the pressures being faced by local authorities.

It says every council in England will see at least a three per cent increase in Core Spending Power before any local decisions are made around council tax.

To continue to support councils providing essential adult and children’s social care services, it said it was making available £1 billion in additional grant funding for social care in 2024-25, compared to 2023-24.

Michael Gove, the Levelling Up Secretary said: "Councils are the backbone of their communities and carry out tremendous work every day in delivering vital services to the people they serve.

"We recognise they are facing challenges and that is why we have announced a £64 billion funding package to ensure they can continue making a difference, including through our combined efforts to level up."

The consultation on the provisional settlement will be open for four weeks, closing on January 15, 2024.

The Government will provide confirmation of the final local government finance settlement once the consultation has closed and all responses have been considered in early 2024.