Council funding deal: who are the winners and losers and will tax bills go up?

"This sets out each local authority's core finance allocation, enabling them to set local council tax bills for next April and finalise an overall budget. For the first time, government funding for councils was distributed using a new Fair Funding formula that gives higher weighting (and thus a greater relative share of overall resources) to local authorities with high deprivation scores (relative deprivation is measured by factors such as income, employment, health, housing costs, and crime)."

"Middlesbrough, Manchester and Birmingham were among the most deprived local authority areas according to the latest indices of deprivation and they will see some of the biggest increases in spending power from April. Outer London boroughs such as Haringey and Newham also benefit. The losers include wealthier central London boroughs like Kensington and Chelsea, and affluent home counties commuter belt councils such as Surrey."

"Ministers say the new formula is fairer because it directs a bigger share of overall funding to areas that need the most support, reversing years of austerity. Most councils, whether winners or losers in this settlement, are likely to increase council tax bills in April to the maximum allowable (4.99% for an upper-tier authority with social care responsibilities). Some areas (including Reform-led councils that have declared lower council tax bills a political priority) may try to limit the increase."

The government announced a three-year funding settlement that sets each local authority's core finance allocation and enables councils to set council tax bills for next April and finalise budgets. Funding was distributed under a new Fair Funding formula that gives greater weight to local authorities with high deprivation scores measured by income, employment, health, housing costs and crime. Middlesbrough, Manchester and Birmingham will see substantial increases in spending power, and outer London boroughs such as Haringey and Newham also benefit. Wealthier central London boroughs like Kensington and Chelsea and affluent commuter-belt councils such as Surrey lose out. Ministers say the formula directs more resources to areas needing support, but some northern and rural councils call the changes insufficient or discriminatory. Most councils are likely to raise council tax in April to the 4.99% maximum for upper-tier authorities with social care responsibilities, though some may seek smaller increases.

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