Additional £500 million added to the Social Care Grant to bolster social care budgets

Councils across England will receive a £600 million support package, in addition to funding outlined at the provisional settlement, to help them deliver key services.

The support package comes as the UK Government has made significant progress on its economic priorities of halving inflation, growing the economy, and reducing debt. Because of the progress made, we are able to support councils to deliver key services across the country.

The £600 million announcement reflects the unprecedented challenges that council have faced.

The support package will primarily see an additional £500 million added to the Social Care Grant to bolster social care budgets, a key concern raised by councils.

All councils will also see an increase in Core Spending Power of at least four percent through the Funding Guarantee before any local choices on council tax, efficiencies, or reserves – an increase from the three percent announced at the provisional settlement.

The government’s manifesto commits to continuing to protect local taxpayers from excessive council tax increases. The proposed referendum principles strike a fair balance. Local authorities must be mindful of cost-of-living pressures when taking any decisions relating to council tax.

This funding builds on the £64 billion package already announced at the provisional Local Government Finance Settlement for 2024-25 and has been welcomed by leading local government organisations including the Local Government Association, County Councils Network, and District Councils Network.

Minister for Local Government Simon Hoare said: “This injection of funding will help ensure services which people rely on can continue, and demonstrates how important we view local government. We have listened to various organisations and considered their views seriously and I’m grateful to those who reached out to me.

“The funding offers something for all of our hard-working councils, with additional funding for social care as well as help for rural authorities to deliver essential services.”

The Treasury will be providing £500 million with further details set out at the upcoming budget while details on the distribution of this funding will be included in the final Local Government Finance Settlement early next month.

The further £100m comprises of an increase to the Funding Guarantee from three percent to four percent, £15m for the Rural Services Delivery Grant, £3m for authorities with Internal Drainage Boards, and additional funding for the Isle of Wight and the Isles of Scilly with the remainder distributed through the Services Grant.

The £500 million increase in social care funding is in addition to the £1 billion in additional funding announced at Autumn Statement 2022 and in July 2023 to enable councils to continue to provide crucial social care services for their local communities, particularly for children.

The announcement has been welcomed by leading figures in the sector.

Councillor Tim Oliver, Chairman of the County Councils Network, said: “We strongly welcome the government listening to our concerns, and today’s announcement of an additional £0.5 billion will go some way to easing the pressures and in particular addressing the escalating demand and costs of delivering social care and home to school transport.

“Whilst this extra funding will undoubtedly help us protect valued frontline services, councils, of course, still face difficult decisions when setting their budgets for 2024/25.

“Looking further ahead, reform of local government finance and the way in which we are expected to provide services is imperative. Councils require a long-term financial settlement to enable us to plan for, and meet, the demand from our growing elderly populations and the more complex needs of residents requiring social care.

“This must be coupled with a comprehensive reform programme to bring in line the funding envelope available to enable us to deliver effectively our statutory responsibilities.”

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