Spending Review 2025: Briefing 12 June 2025

Key messages

• We welcome the Spending Review delivering on some key LGA asks. Funding announced for children’s services and SEND support will help more children get the right support and avoid reaching crisis point. We are also pleased at increased investment in the Affordable Homes Programme and the commitment to a 10-year rent settlement, which will support councils to invest in maintaining existing homes and ramping up vital new build programmes. Extra investment in places to support regeneration, transport and infrastructure is good news for residents and communities in these places.
• In the coming days, we will analyse the detail of the Spending Review to assess the full impact on councils and communities. A recommitment to multi-year local government funding settlements is welcome and essential for financial planning while efficiency and innovation continues across local government. However, all councils will remain under severe financial pressure. Many will continue to have to increase council tax bills to try and protect services but still need to make further cutbacks.
• While the Government faced, and continues to face, tough choices, the announcement of additional future funding for adult social care is good news. However, it is unlikely to be sufficient to address all immediate pressures and ongoing challenges, which will be a concern for councils, care providers, the wider sector and, most importantly, people who have reason to draw on care and support.
• We expect the Government to provide urgent clarity on how it plans to address high needs deficits, which are projected to rise to £5 billion next year, as part of its forthcoming SEND reforms. Over half of councils have warned they will become insolvent next year when the statutory override flexibility ends, and we continue to urge government to write off these deficits.
• Public service reform and investment in prevention, especially in social care and SEND, can reduce costs and demand, and councils want to continue working in partnership with the Government on this agenda. Council financial pressures are also exacerbated by an outdated funding system, so we look forward to the consultation on reform and a roadmap to a sustainable, long-term financial model for local government.

LGA view

• It is positive that the Spending Review delivers on some key LGA asks. Funding announced for children’s services and SEND support will help more children get the right support and avoid reaching crisis point. We are also pleased at increased investment in the Affordable Homes Programme and the commitment to a 10-year rent settlement.
• However, all councils will remain under severe financial pressure. Many will continue to have to increase council tax bills to try and protect services but further difficult decisions will need to be taken.
• The LGA has continually highlighted that council tax rises – particularly the adult social care precept – have never been the solution to the long-term pressures faced by councils. This is particularly the case for social care where increases in costs and demand do not align with capacity to raise council tax. Increasing council tax raises different amounts of money in different parts of the country, unrelated to need.
• We will analyse the detail to assess the full impact on councils and communities. This includes seeking clarity on the role played by the different funding streams that contribute to the increase in core spending power. We look forward to responding to further consultations on local government finance reform.

LGA view 

• An increase in council tax of up to 5 per cent will place a significant burden on households. In addition, increasing council tax raises different amounts of money in different parts of the country not related to need.
• It is disappointing that the Government has had to continue to rely on council tax and the social care precept, alongside grant, to fund adult social care. Council tax is not the solution for meeting long-term pressures facing high-demand national services such as adult social care. The assumption that not only the adult social care precept but also a substantial part of any council tax uplift should fund adult social care leaves little for other council services on which all residents depend.
• We support abolishing council tax referendum limits so, in due course, alongside the completion of the fair funding review or its equivalent, councils and their communities can decide what increase in council tax is warranted to help protect or improve local services.

LGA view

• The funding system is out of date, opaque, and overly complex. We continue to press for transitional mechanisms to provide sufficient funding to ensure that no council experiences a loss of income from the Fair Funding Review, or its equivalent. We look forward to responding to further detailed consultations.
• Wider reform is needed, which is why we have called for a cross-party review of, and debate on, options to improve the local government finance system, including a review of council tax alongside other funding sources. The review also needs to consider an assessment of whether business rates retention represents a viable future funding model.
• Local government should be funded through general rather than ring-fenced grant funding, with a reduction in the fragmentation of Government funding. There should be an end to the use of competitive bidding to allocate grant funding. LGA research estimated that the average cost to councils in pursuing each competitive grant was in the region of £30,000 costing each local authority roughly £2.25 million a year bidding for various pots of money across Whitehall.
• We support rolling grants into the settlement in the interests of simplicity. This needs to be done in a transparent manner.
• In line with the Government's commitment to working with local government in genuine partnership to deliver better outcomes, we look forward to Government co-producing with the sector its approach to setting out and measuring progress on key services and outcomes.

LGA view

• The LGA is working closely with the Cabinet Office on the Test, Learn & Grow programme to improve policy outcomes across the public sector. Learning from the pilot areas will support councils to test and deliver new, innovative approaches.
• Place-based approaches could have a transformative impact on public service delivery. But success depends on stable institutions, shared goals, empowered leadership, sustained resources, mature data systems, and effective convening power.
• It is positive to hear the Government’s ambition to integrate services, so that they are organised around people’s lives. Pursuing coterminosity and integration of public services could bring greater governance in areas around health, transport etc, and potentially more cohesiveness from additional accountability, but local institutions need clarity and support to maximise the benefits for communities.
• Integration coupled with devolution is welcomed. The LGA argues for a reset in the relationship between central government and places, based on trust and a principle that local areas know what’s best for their communities. This must be signalled clearly by central government and followed by changes to the distribution of power, changes to the approach to funding local government, the NHS and other local services, and a more holistic view by regulators.
• Alongside these ambitions, the LGA calls for the Government to set a clear expectation that local services move to place-based working and introduce a formal ‘duty to collaborate’ that obliges local leaders to work together. This duty should push places to use the powers that they already have to build local partnerships, whilst recognising that place-based working will look different in each area based on needs, population, relationships and capabilities. The duty to collaborate should be supported by an approach to regulation that includes a ‘whole place’ view of public services.
• Central government should limit its mandate on places to minimum standards associated with statutory responsibilities. Central government should empower places to deliver local priorities, the mandates of locally elected leaders and a local response to the challenges of national missions in a way that works for them and fits with the local context. This should apply across all local public services, including in the NHS.

LGA view

• At this stage, and with detail still to come, it is difficult to make full sense of the announcements related to adult social care. We will be seeking further clarity over the coming days.
• On the face of it, the announced increase of over £4 billion in 2028/29 (compared to 2025/26) and the increase in the NHS contribution via the Better Care Fund is welcome. However, it is unlikely to cover the full range of pressures that councils face, in particular inflation, demographic change, the National Living Wage and increases to employers’ national insurance contributions. Other challenges persist, such as high numbers of people waiting for an assessment of their needs or for their care package to begin, growing strain on unpaid carers, and continued instability within the provider sector.
• The continued reliance on the social care precept continues an unsustainable approach to funding adult services; it raises different amounts of money in different parts of the country, is unrelated to need, and adds an extra financial burden on households. The increase in the NHS contribution to adult social care is particularly welcome; local government must play a central role in informing the future shape, purpose and deliverables of the Better Care Fund.
• We will welcome further information on community help partnerships as we have long championed the need for more investment in earlier action and preventative activity. This is key to providing earlier support and reducing or delaying the onset of more acute conditions, responding to which comes with a higher cost. Councils and the voluntary and community sector already do important work in this area but could do more with the right investment.
• It is disappointing that the Government did not use the Spending Review to make an explicit commitment to fund agreements reached by the Adult Social Care Negotiating Body. Increasing care worker pay is critical to tackling the long-standing recruitment and retention challenges facing the sector and, in turn, better supporting people who have reason to draw on care and support to live the lives they want to lead. The Government rightly champions its work on a Fair Pay Agreement for adult social care, but its success depends on its costs being fully funded; neither councils nor providers will be able to absorb the level of likely costs involved.
• The headline adult social care figures announced at the Spending Review seem to assume that all councils with social care responsibilities will raise both their council tax and adult social care precept to the maximum. The headline figures also appear to assume that councils will allocate all the additional income raised from the increase in the council tax rate threshold to adult social care. Consequently, the announced new funding is best seen as a potential maximum amount, rather than as guaranteed new income to support adult social care. Furthermore, if the Social Care Grant is to be part of the additional package, this is not prescribed solely for adult social care and can also be used for children’s social care.
• The accompanying ‘Spending Review 2025: Departmental Efficiency Plans’ commits the Department of Health and Social Care to delivering efficiency gains of £9.1 billion per year by 2028/29. The bulk of this will be delivered through “the NHS productivity plan to achieve 2 per cent annual productivity growth over the Spending Review period”. This cannot be achieved without an adequately funded and sustainable adult social care sector. On paper, and while we await the promised detail, this Spending Review does not deliver that.

LGA view

• It is positive to see priorities which build on the commitment to deliver three strategic health shifts. We support the three strategic health shifts – from analogue to digital; hospital to community; and treatment to prevention – and look forward to seeing further detail as set out in the forthcoming 10 Year Health Plan as to how these will be achieved.
• Our members continue to share examples of how the financial strain on the NHS is severely hindering councils’ ability to deliver essential services and jeopardising the vital relationship between the NHS and local government. The recently announced reductions in Integrated Care Board running costs are further exacerbating this.
• We are concerned that this spending review has once again overlooked public health funding for local authorities. While investment in the NHS is vital, it must be matched by a strong commitment to the public health grant, which plays a key role in building a healthier future. Our members have seen first-hand that protecting NHS budgets while cutting other essential services ultimately leads to higher costs and poorer outcomes.
• We support reiteration of the three principles guiding public sector reform – especially to integrated services, so that they are organised around people’s lives. At its best, health and local government integration is built around the individuals’ needs so that they easily access the support they need to flourish.
• Any changes to the Better Care Fund (BCF) must recognise the NHS Adult Social Care (ASC) Transfer Fund which preceded BCF and is a core element of it. BCF must ensure that health and social care provide the right care, in the right place, at the right time, so that people stay well, safe and independent at home for longer. It must focus on prevention and early support to promote independence.

LGA view

• The proposed £10 billion for NHS transformation, an almost 50 per cent increase from 2025/26, and £4 billion for adult social care are welcome. The NHS cannot deliver on these shifts working alone. Health and local government are two sides of the same coin. For both parts of the system to deliver and realise the outcomes needed, both need to be sufficiently resourced.
• To realise analogue-to-digital ambitions, there must be equitable investment in social care digital transformation alongside that of the NHS. Councils need targeted support for innovation, infrastructure and workforce development to modernise services and meet rising demand. Digital inclusion and connectivity are fundamental to a modern health and care system. Councils, with their deep local knowledge, are best placed to lead this work, but they need investment and collaboration to close the digital divide.

LGA view

• The increase in core schools' budgets is welcome, but we are concerned that the 1.1 per cent increase will be offset by inflationary pressures and the need for schools to contribute to teacher and school staff pay increases. While we acknowledge the financial challenges that schools are facing, the same is true of councils who are facing a cumulative high needs deficit of £5 billion by 2026. It is therefore vital that a proportion of the £4.7 billion cash increase by 2028/29 is allocated to council high needs budgets to ensure they can continue to meet growing need for Education, Health and Care Plans.
• We support the Government’s commitment to reform the system that supports children and young people with Special Educational Needs and Disabilities (SEND). Reform is needed urgently, and we await early clarification on the shape of the reforms in the Schools White Paper, as well as how Government plans to eliminate council’s dedicated schools grant deficits as part of the local government funding reform consultation.
• The £760 million in funding for 2026/27 and 2027/28 to support reform of the SEND system is welcome. We look forward to working with the Government to ensure this funding is focussed on early identification of need and early intervention, as well as increasing levels of mainstream inclusion.

LGA view

• By announcing £555 million from the Transformation Fund over the Spending Review period we are pleased that the Government has recognised the pressures on councils to deliver on children’s social care reform. It is particularly positive that the funding focuses on those areas councils have emphasised will make a difference to children and families – improved, timely family support, and fixing the broken care market, and that this is on top of maintaining the existing £523 million per year for children’s social care prevention within the Local Government Finance Settlement. This will support councils to implement these crucial reforms to ensure that every child receives the help they need, when they need it, and is able to enjoy a happy and healthy childhood.
• Additional funding of £560 million to expand placement capacity for children in care, combined with action to fix the broken care market, will help ensure that every child who cannot remain safely at home can live in a loving home that meets their needs. We have welcomed efforts by the Government to work with local government and our partners to address the shortfall in suitable placements and look forward to driving this work forward. It will be vital that the NHS plays its part in delivering this new placement capacity.
• While this further funding for social care is helpful, LGA analysis shows that children’s and adult’s social care faces additional cost pressures of £3.4 billion in 2025/26 compared to 2024/25. This ongoing shortfall puts services for vulnerable children and adults at risk and severely limits councils’ ability to support the Government mission to break down barriers to opportunity. It will be important that financial support for vital transformation work is ongoing, given the extent of demand pressures councils are facing this year and next.

LGA view

• We welcome the Government’s ongoing commitment to the development of a National Youth Strategy and the allocation of dormant assets to support disadvantaged young people in their communities. We will continue to work with Government to ensure that the strategy supports councils to deliver for young people in their families.

LGA view

• The LGA welcomes the expansion of eligibility for Free School Meals. It is now more vital than ever that the Government implements national auto-enrolment to ensure that all those who might benefit can access support as efficiently and accessibly as possible.
• There must be a clear, integrated and sustainable approach to tackling holiday hunger in the forthcoming child poverty strategy. We are concerned that the only source of support will be the Crisis and Resilience Fund (which replaces Household Support Fund and Discretionary Housing Payment) when the Holiday Activities and Food Fund, worth £200m per annum, ends in March 2026.

LGA view

• Healthy Start provides welcome support to low-income families. However, the funding has not been increased since 2021 and eligibility is too tightly drawn. The LGA would like to see this addressed in the autumn as part of the Government's child poverty strategy.
• The LGA has consistently asked for local welfare funding to be made long-term and sustainable. We are pleased that the Crisis and Resilience Fund has been confirmed until the end of the SR, giving councils and partners the opportunity to plan and embed services.
• We welcome the emphasis on resilience and prevention. The ability to fund advice provision was a welcome amendment in the previous guidance. We look forward to working with the Government and advice providers to improve access to support that prevents people from falling into further hardship including welfare rights, debt, money and housing advice.
• The explicit alignment of Discretionary Housing Payment and Household Support Fund is a step towards streamlining funding. However, these two pots are currently funded in different ways and are distributed to different tiers of local government. It is vital that, now that they being brought together, the Department for Work and Pensions works closely and collaboratively with the LGA and councils to co-design a successor scheme that is an improvement on the schemes it replaces.
• Parents should not need to rely on discretionary funding, vouchers or parcels to ensure that their children do not routinely go hungry outside of term time. It is the LGA’s view that the Department for Education should lead on holiday hunger and malnutrition in an approach that is properly aligned with Free School Meals. This is of particular concern since £200m annual funding for the Holiday Activities and Food Fund is due to end in March 2026.

LGA view

• We welcome the announcement of continued investment in Family Hubs and urge the Government to deliver a fully funded expansion to all local authority areas to ensure all children get the best start in life.
• We welcome the reconfirmation on the plans for the delivery of breakfast clubs, the funding for the early years entitlements expansion and the clarification of funding available for school-based nurseries and we look forward to continuing to work with the Government to support local authorities to deliver on these policies.

LGA view

• This is a very positive package of measures covering many of the issues we have lobbied on.
• We will be seeking further detail from the Government on when and how this range of measures will be implemented. Clarity on the future regulatory environment and related expenditure requirements for stock-holding councils will also be essential to support long-term investment planning for both existing and new homes.
• It is positive that the Government has acted on our call to increase funding for the Affordable Homes Programme. We have long made the case for councils to be empowered to build more affordable, good quality homes quickly and at scale. This announcement will enhance councils’ ability to build desperately needed affordable housing for local communities over a 10-year funding period. It is important that funding made available for supported housing schemes - including specialist provision for disabled people, older adults, and people who need support with their mental health - is matched by adequate revenue support to make these schemes sustainable.
• The Government’s commitment to a 10-year rent settlement also marks a significant step toward establishing a sustainable funding framework for social housing, which will support councils to both invest in maintaining existing homes and ramp up vital new build programmes. The LGA has long called for a 10-year social housing rent settlement to increase confidence and capacity in council’s Housing Revenue Accounts, and it is positive that a consultation on implementation of rent convergence will soon be published. The Government should also bring forward further Right to Buy reform to protect valuable housing stock, including the ability for councils to set discounts locally.
• We look forward to seeing further details on how councils that are registered providers of social housing can access the new low-interest loans. In particular, we are keen to understand how these loan rates compare to current Public Works Loan Board (PWLB) rates. It is important that these loans are made accessible to councils both with and without Housing Revenue Accounts.
• Measures to support additional private investment to boost housebuilding are welcomed. Further, the Government’s commitment to invest in infrastructure and land remediation to deliver new housing schemes is positive, as it is recognised that the lack of important local, regional and national infrastructure as well as the financial costs and complexities to remediate land can delay or prevent suitable housing developments coming forward. We await further detail on New Towns and urge Government to recognise the important role of councils in enabling the suitable identification and delivery of new towns.
• Additional funding for the Local Authority Housing Fund (LAHF) is also positive and will provide vital additional homes to help councils address unsustainable temporary accommodation pressures. To further support councils Government should also change outdated housing benefit reimbursement rules for temporary accommodation and also reconsider its decision to keep Local Housing Allowance rates frozen for other types of accommodation until at least April 2026.
• It is positive that Transformation Fund money will be made available to support early homelessness intervention. Councils will also need certainty on multi-year Homelessness Prevention Grant allocations as soon as possible, to support business planning processes and service continuity, alongside the publication of the cross-government homelessness strategy.

LGA view

• The LGA has long called for social housing providers to be given access to remediation funds on the same basis as private landlords – this change is overdue and welcome.
• It is concerning to see that there is no reference to the promised confirmation of funding for Residential Personal Emergency Evacuation Plans (PEEPs) in social housing.

LGA view

• The government is seeking to provide clarity as the transition happens away from the UK Shared Prosperity Fund towards new targeted, long term growth funds. Greater clarification is needed about how these funds, such as the Growth Mission Fund and the investment which will be made in 350 deprived communities will operate Local government wants to be fully involved in the development and delivery of these funds to ensure that they address place-based inclusive growth issues and ensure a smooth transition to longer term growth funding for all areas. It is essential that every area receives funding to support local inclusive growth ambitions and that funding should be allocated through a transparent formula based around need rather than operating a competitive bidding process.
• The LGA has long called for genuine devolution to all councils. The Government’s plans for devolution are being taken forward through the Devolution Priority Programme and the forthcoming English Devolution Bill. Where all councils in an area want to accelerate the reorganisation and mayoral devolution programme and are not part of the current Devolution Priority Programme, they should have the opportunity to access a devolution agreement. This country has benefitted from the strong local leadership of councillors and council leaders, and it is part of the role of the LGA to support them in this endeavour. Their engagement and support of this agenda will be crucial to its success.
• The LGA welcomes the announcement of the 10-Year Infrastructure Strategy, which will provide certainty for local government, industry and businesses to plan and invest in delivering infrastructure investment.
• The LGA welcomes the announcement of an uplift in research and design (R&D) funding. To foster stronger partnerships, increased support is needed to help councils realise the value of academic collaboration, develop compelling cases of research, and identify and engage with relevant academic institutions. By strengthening these bonds, local government can harness the power of academic research to drive innovation, improve service delivery, and ultimately benefit communities.
• We welcome the establishment of a new local growth fund for specific mayoral city regions in the North and Midlands, as well as the integrated settlements for London. It is positive to see the move towards a longer-term departmental style funding, removing funding silos, as well as a dedicated capital settlement, something the LGA has previously called for. However, the decision to focus investment in mayoral areas underlines the challenge for those areas yet to secure a devolution settlement. Councils across the country are keen to play their part in driving inclusive economic growth and all communities stand to benefit from new investment.
• We also welcome the clarity provided in the supplementary Integrated Settlement policy document setting out the approach to determining the quantum of integrated settlements ahead of future Spending Reviews, principles for funding formulae, and that both the formulae and future integrated settlement agreements will be made public.
• The Government should now press ahead and clarify the eligibility criteria Strategic Authorities must meet to secure an integrated settlement without undue delay.
• While enabling 10 per cent flexibility between integrated settlement pillars is a positive step forward, this is still restrictive. The LGA is keen to see all areas have the flexibility and freedom to fully invest funding according to local need and the pursuit of better outcomes for business and communities.
• The LGA looks forward to the upcoming publication of a national Industrial Strategy. The LGA has previously called for a clearly articulated national economic policy that sets objectives, how local economic growth contributes to this, how local economic inequalities will be addressed, and a clear framework and role for local devolution policy. We submitted a comprehensive response to the Industrial Strategy green paper in November and have recently provided written evidence to the Business and Trade Committee.
• We believe that these ambitions can best be achieved by working in partnership with councils, drawing on their crucial roles in identifying the opportunities for growth, working with the private sector, undertaking planning and regeneration, working on skills and training and facilitating accessible and affordable transport and digital infrastructure. Crucially, this involves enabling councils to best deliver for their communities. To this end, we believe that it is crucial that local government is represented on the Industrial Strategy Council.
• The LGA welcomes the publication of guidance on the development of a Local Growth Plans which will provide clarity to local areas, and particularly those beginning their devolution journey.
• Those places not currently in a mayoral combined authority area are ready now to work with the Government on supporting economic growth and the Industrial Strategy. The LGA calls for the Government to expand the vision for growth that foundation strategic authorities have been tasked to produce, or a similar policy equivalent, to be extended to all areas of England.

LGA view

• The LGA welcomes this confirmation of a significant increase in transport funding. It is good news for residents and communities in these places which will boost local economies by connecting more people to jobs and services. In particular, the LGA welcomes the increased Local Transport Grant funding so that areas without a TCR settlement can benefit from devolved, long-term funding without the need for competitive bidding that Mayors have enjoyed, bring transformative improvements to the way people travel everywhere, benefiting everyday lives and businesses.
• The LGA welcomes the increase in funding for local roads. Councils must be put on the same footing for funding as National Highways with confirmed multiyear local roads settlement to maximise value for money. Investment in road repairs has been greatly impacted by inflation; today’s step increase in funding for highways maintenance will enable councils to continue with planned schemes and bring forward more. Local roads will require a greater share of the total roads funding in this spending review and beyond than it has had previously, to start filling the £16.3 billion back log in roads maintenance.
• Longer term funding for buses and the bus fare cap extension to 2027 will help councils and operators to plan for and invest in improvements to bus services. The departmental support for areas wishing to pursue franchising is welcome reflecting the challenges many areas will face. More work is needed to attract travellers back onto buses to ensure services are sustainable for our communities. We would like to see further simplification of funding for bus funding with a reformed Bus Service Operators Grant.
• The additional longer-term funding for electric vehicles, chargepoints and active travel will help councils continue to support people to be more active, save money and help protect local air quality and the planet. Councils are leading the way on enabling the rollout of public chargepoints, and the partnership between the Office for Zero Emission Vehicles (OZEV) and councils on the Local Electric Vehicle Infrastructure fund has shown how co-design and collaboration between local and national government improves the effectiveness and efficiency of investment.
• In addition to long-term certainty, the Government must ensure that these local transport funds are simple and consolidated to enable councils to plan effectively for the long-term and develop and deliver a pipeline of schemes and services work for passengers and investors.

LGA view

• The announcement to increase the employment support funding envelope to £3.5 billion by 2028/29 to help people move into, and progress into work, is positive. How this funding is used will be critical. The Government recognises elsewhere in the Get Britain Working white paper reforms and Pathways to Work green paper that integration and place-based approaches are vital. We are keen to engage with Government on how to achieve this through a place-based employment support eco-system which links to wider services, partners and employers.
• The Government confirms the continued roll out of Connect to Work (CtW). This is being grant funded across England to mayoral strategic authorities (MSAs) and (clusters of) councils in non-devolved areas. We will seek to confirm that funding for CtW extends to the end of this Parliament. Councils could deliver more with greater flexibility around budget allocations across financial years.
• The announcement to extend both the youth employment and inactivity devolved trailblazers is welcome. MSA areas have only just stood up provision for the 12-month trials. Extending these will provide more time to test new approaches. This testing will provide vital learning on how we take a more place based, preventative approach, bringing together MSAs, their constituent councils and local partners. Expertise on how to address inactivity and youth unemployment exists in areas outside of devolution too, so we urge the Government to consider how it can trial approaches in these areas. In tandem with these trailblazers, the LGA looks forward to informing the wider policy of these Get Britain Working reforms.
• On skills, we are keen to work with Government to ensure this new funding to support young people into training is used to best effect. Local government – councils and mayoral strategic authorities – are best placed to support local employers with their workforce needs and help influence the education and training offer working with local further and higher education institutions and partners to build pathways. The LGA has called for local government to be involved in the design of the Growth and Skills Levy. Ultimately, we want to see its use maximised to address the workforce needs of local government as an employer as well as employers across the local economy, improve life chances by promoting social mobility and support local growth. Our wider Work Local employment and skills offer recommends a radical reshape of the system. One of the three offers proposed is Skills for All – a service to address employer workforce needs, better match local skills supply and demand, promote lifelong learning, and link in the careers advice offer.

LGA view

• The introduction of place-based business cases is welcomed as it recognises the need for central government to have a greater focus on the connections between the different projects they deliver in a place. The sector would like greater engagement in how place based business cases will be developed and delivered across government.
• Councils have a proven track record of delivering inclusive growth to their local communities. Through the services they provide, their work on producing local economic and industrial strategies, and their crucial convening role, councils are ideally positioned to lead in place and influence drivers of inclusive growth which are intrinsically local.
• The LGA was one of the bodies consulted in this review. In the LGA’s view, many decisions currently made centrally on how money is spent locally would be better made locally where impact is best understood.
• We look forward to reading the detailed outcome of the review and the new Green Book guidance.

LGA view

• Investment in nature protection and recovery is predominantly channelled through schemes to farmers. Separately, Local Nature Recovery Strategies are currently being developed by local government in partnership with farmers, landowners and communities. It is critical that those strategies have the levers to shape, coordinate and target spending to meet community expectations around delivery.
• It is positive to see investments in new, and maintenance of existing, flood defences. As Lead Local Flood Authorities, it is critical that local authorities are able to play a greater role in shaping capital investments in flood defence measures working with the Environment Agency. We look forward to a future consultation on these issues.
• Some member councils are particularly concerned about the pressures of rising Internal Drainage Board levies, which in some cases accounts for up to 60 per cent of their council tax. We would ask the Government to find a solution to this, working together with affected authorities.

LGA view

• It is positive that income into local authorities via the Packaging Extended Producer Responsibility (pEPR) scheme will be additional to the Local Government Settlement. This is something that the LGA has made representations on for some time; in 2025/26 English local authorities received £1.2 billion via pEPR. We welcome discussions with the Government around how the existing resources are treated into the future.
• Simpler Recycling reforms are to be implemented by April 2026, including for mandatory food waste collections. It is critical that the funding allocations to local authorities are communicated as soon as possible, so that they can begin to take the spending decisions to introduce new services. Many local authorities have raised concerns that previous food waste new burdens funding is insufficient to meet costs.

LGA view

• The LGA welcomes the commitment to the Warm Homes Plan and recognises the opportunity Carbon Capture, Usage and Storage presents both in terms of meeting Net Zero targets and generating jobs and investment.
• Government should prioritise the Warm Homes Plan which has the potential to reduce energy demand, tackle fuel poverty and create homes that are warm, affordable and healthy. It is important that the Government works with councils to deliver a joined up, long term, devolved approach to housing retrofit in all parts of the country. Local government is uniquely able to lead, join-up and target net zero action in places, for half the cost of a national approach and deliver three times the growth, jobs, skills and health benefits. This is evidence from Govt’s own UK Research Institute.

LGA view

• Coupled with the policy announcements about a shift to local growth plans, a streamlined Green Book, and new social impact investment vehicle, these investments will help councils drive creative and cultural growth in their areas. The LGA’s cultural devolution think pieces outlined how this transition to place-based investment can work in practice, and we are ready to support the Department for Culture, Media and Sport (DCMS) arms-length bodies as they adapt their investment approaches to reflect the new policy direction.
• To further unlock local investment, Government should take a localist approach and allow councils the power to introduce a local tourism levy for those who choose to implement one. This will enable councils to benefit from local visitor numbers and invest in the facilities, infrastructure and attractions that support the visitor economy.
• The investments in sport and physical activity will boost productivity through tackling ill health, as well as build the pride in place that communities derive from well-run sports facilities and leisure centres. These investments will need to connect to the announced shift towards a preventative approach, building on the good work that councils are already doing but strengthening their ability to connect with health systems.

LGA view

• We welcome the continued commitment to the development of one or more social impact investment vehicles. Bringing together socially motivated investors with the Government and the voluntary and community sectors can increase the impact of investment to tackle a wide range of complex social problems, including poverty, worklessness, homelessness and access to opportunities.
• It is vital that the design of the investment vehicle recognises the unique perspective, legitimacy, experience and knowledge of local government and incorporates the sector as a key player. Councils hold the key relationships with their communities and local voluntary, community, faith and social enterprise organisations that will enable investment to be effectively targeted. Councils also have the convening power to help ensure that programmes and projects can be co-designed and delivered with residents.

LGA view

• The LGA welcomes the investment in digital transformation and the drive to creating a more productive and agile state. Local government, as a sector delivering vital frontline services across the country, is a vital part of the innovation ecosystem. The success of a public sector wide approach includes ensuring local government has a seat at the table in national strategic discussions, particularly the development of the Digital and AI Roadmap prioritisation of piloting, the co-design of App and Wallet going forward, and in the development of the National Data Library. We are yet to get clarity relating to funding of a Local Government Centre for Digital Technology proposed in the LGA Spending Review submission. We look forward to working with both the Ministry of Housing, Communities and Local Government (MHCLG) and DSIT to ensure that Local Government gets the support needed for digital transformation.
• While there is significant early-stage innovative piloting of the use of AI in local government, local government requires investment to innovate - both to explore readiness for and the use of AI, particularly to address legacy systems debt, building staff capabilities and strengthening data foundations. Ongoing access to technologist support is key in the context of capacity and capability, as well as design pilots that facilitate collaboration across councils to test the scalability of solutions, building on the work of the Incubator for AI and the LGA in the Minute pilot. Addressing digital and technology foundations in local government is particularly urgent given Government ambitions with local government reorganisation (LGR) and the variation in maturity across the sector.
• Underpinning all digital transformation ambitions to create seamless user experience is ensuring that communities are digitally included. Realising the Government's digital inclusion ambitions requires a fundamental shift towards recognising and sustainably investing in local authorities as strategic partners, leveraging their unique expertise and community connections. The current inconsistent landscape demands a commitment to long-term investment in local government digital inclusion capacity that enables the scaling of successful, locally-led digital inclusion initiatives. Long-term, sustainable investment in dedicated local digital inclusion teams and initiatives is essential to build robust ecosystems and achieve lasting, positive impact within communities.

LGA view

• The UK’s ambitions for economic growth and regional equality depend heavily on achieving widespread digital connectivity and digital inclusion. While the Government has set ambitious targets for broadband and mobile coverage through initiatives like Project Gigabit, reaching these goals demands a concerted effort to empower local authorities, who possess the unique local knowledge and understanding to effectively address the specific connectivity challenges faced by their communities. Furthermore, many local authorities lack the resources and expertise to effectively plan, deploy, and manage complex digital infrastructure projects. This capacity gap hinders progress and exacerbates existing inequalities. Local government needs sustained capacity and capabilities support to address some of the barriers experienced locally, including capacity for street works, digital infrastructure planning, and coordination of infrastructure projects across councils and regions.

LGA view

• The announcement to close hotels during the course of this parliament is a step in the right direction. This needs to lead to a more equitable distribution of asylum seekers across the UK by the Home Office and their providers to reduce the impacts on areas already facing disproportionate pressures from both hotels and dispersal accommodation. Councils must be fully engaged well in advance of any decisions on opening or closing asylum accommodation rather than after a decision has been made.
• We are keen to work jointly with the Government on reducing the asylum backlog so it reduces risks around homelessness, cohesion and unsustainable costs falling to councils. Councils need the one-off move on grant funding that recognised the significant costs to councils of the current backlog clearance to be increased, a permanent change to the current temporary extension of the move on period and a more strategic approach to integration across all cohorts to reduce those risks.
• We remain keen to work with the Government to co-design the future asylum accommodation and support system across all ages. Any savings from hotel closure could also be rerouted to councils to recognise current unsustainable costs and pressures. Asylum and resettlement also affects all councils’ capacity to source temporary accommodation given wider housing system pressures, creating immense pressures in areas with higher numbers. It could also support the integration of all new arrivals, foster welcoming communities and reduce risks of anti-asylum activism and community tensions.

LGA view

• We welcome additional funding for the police and a commitment to recruit a further 13,000 extra police. However the police are unable to reduce crime and deliver safer streets on their own, so we continue to push for community safety-related services to be adequately resourced, including increased community safety partnership capacity (such as additional analytical capacity, wardens and CCTV).

LGA view

• The LGA welcomes funding to increase prison capacity while also ensuring funding to reduce the backlog in the courts. This will help ensure victims receive swifter justice.
• The LGA welcomes a commitment to a balance between custodial and community sentences. We continue to push for councils to receive adequate resources to support community-based sentences.

LGA view

• It is crucial that investment is made to equip public sector workforces beyond the civil service with the necessary skills and knowledge to manage and utilise digital technology, particularly AI, effectively. The ‘workforce crisis’ that local government is experiencing can and should be tackled by targeted reform and support. This could include online courses, workshops, dedicated AI certifications for staff and digital leadership programmes. The training available to civil servants should be made available to all public sector workers, including council staff.
• On capacity, local government is plagued by skills shortages across its digital workforce. For some areas LGR will further impact capacity as technical effort is focused on the safe transition to a new Unitary council to establish good foundations for longer term transformation, whilst trying to retain staff through a period of uncertainty. There needs to be long-term workforce planning and investment in digital and technology practitioners within the public sector. This could save considerable sums of money spent on consultants each year. The LGA has been developing a national strategy and action plan to address the workforce challenges that digital and ICT services face in councils within the sector.
• On capabilities, digital upskilling and reskilling across local government demands substantial effort and customisation to respond to varying levels of digital maturity across the sector. We need an approach tailored to the sectors unique needs, demands and characteristics. The LGA’s Cyber, Digital, Data and Technology (DDAT) Skills Framework provides a common language and framework for understanding and developing the cyber and DDAT profession across local government. We would welcome collaboration with DSIT and MHCLG to further develop and promote this framework, integrating it into broader workforce planning initiatives and career pathways to support councils in their digital transformation journeys.

LGA view

• We look forward to seeing the outputs of the study into the procurement of short-term residential accommodation. Uncoordinated public sector procurement of private housing where government departments compete with councils for the same properties has driven up local accommodation costs, accommodation may be “reserved” for specific cohorts, leaving large numbers of properties void in areas where the demand from those cohorts is lower than supply. There are significant opportunities to explore and test new models for procurement and support for cohorts at risk of homelessness, in collaboration with councils. This includes refugees and asylum seekers, care leavers, or people leaving prison.

LGA view

• We are increasingly concerned by the absence of any formal communication or consultation on plans for the 2031 Census. There has been little to no engagement with the sector, despite local government’s reliance on census data for service planning. Yet, it is clear from this paragraph that the Government will be making a decision shortly.
• Our concerns stem from the growing indications that there may be a decision to undertake an administrative data-based approach. Whilst the sector welcomes the potential of more frequently updated data, we strongly believe that administrative data cannot currently serve as a complete substitute for a traditional census unless rigorously validated against one. The 2021 Census, conducted during the COVID-19 lockdown, posed significant limitations in this regard.
• We would like to see a traditional 2031 Census, against which an admin-based approach can be fully compared, alongside formal consultation with key stakeholders, including local government, before any final decision is made to adopt a fully administrative-based approach.