Local Government Association Autumn Budget submission states more funding needed for devolution

Image: The Local Government Association's HQ in Smith Square, London SW1 (credit Creative Commons - Amelials)

Ambitions to rewire the state and boost good growth across the country will only succeed if the Government confronts the financial crisis facing councils and local services and turbo-charges genuine English devolution, the Local Government Association (LGA) reports. 

The Prime Minister has set out ambitions for fiscal devolution and widespread devolution to local areas with new powers over skills, transport, employment support, housing, innovation and public services. A white paper is expected following the Autumn Budget detailing the reforms in full.   The LGA is working with councils and strategic authorities to help shape the white paper to ensure proposals are genuinely deliverable and can succeed.   

In its Autumn Budget submission, the LGA, which represents local authorities across England, says councils support government’s commitment to deliver meaningful devolution across England. However, it is clear that councils – the constituent bodies of strategic authorities – also need access to the powers and funding to deliver vital services and prosperity for residents, including any areas currently without mayors or strategic authorities. 

The full value of local government will only be realised if both strategic and local authorities are empowered and financially sustainable. A financially vulnerable council sector risks undermining the value and contribution of strategic authorities. The LGA said under pressure council finances also have implications for residents and the services they use and rely on every day. It could mean longer waits for adult social care assessments, rising homelessness, and cuts to neighbourhood services including road maintenance, libraries, parks and waste collections. 

Councils have seen some funding growth in recent years, while a much-needed multi-year funding settlement has improved councils’ financial certainty. However, despite already delivering billions in savings and efficiencies since 2010/11, councils still face a £7 billion funding gap by 2028/29, and one in five councils with social care responsibilities required Exceptional Financial Support from Government to set a balanced budget for 2026/27.   The LGA said councils desperately need an increase in overall funding to stem the emerging risk of system-wide financial failure and to ensure that councils can meet demand for the vital services needed by their communities and play a lead role in inclusive growth and service reform. Specifically, the LGA is calling for Government to:  

• Deliver meaningful fiscal devolution by ensuring that the fiscal roadmap, to be published with the Autumn Budget, and the subsequent white paper include both revenue retention and raising opportunities for councils. 

  
  

• Introduce a revised approach to Exceptional Financial Support – a broader response that addresses the underlying cost and demand pressures facing the sector is needed. 

  
  

• Deliver on its previous commitments to look at ways to reduce burdens on local authorities by reviewing sales, fees, charges and statutory duties. 

  
  

• Commit to writing-off historic and accruing Dedicated Schools Grant deficits fully and reconsider the decision to net surpluses from non-high needs blocks off the deficit. 

  
  

• Ensure that growing financial pressures on NHS budgets are not transferred to council budgets. 

  
  

• Fully fund the costs to councils of the Government’s reform programme for the adult social care workforce, including the introduction of a Fair Pay Agreement. 

  
  

• Set out a clear timetable for local government reorganisation and take steps to ensure councils are not left to pick up the bill following the recently announced review. 

  
  

  Councils are the engine rooms of good growth, injecting £117 billion annually into local economies. Through the services they provide, their work on producing local economic and industrial strategies, and their crucial convening role, councils are ideally positioned to shape planning, transport, skills, infrastructure and investment.  Yet without the measures set out in the LGA submission, councils may struggle to provide the firm, local bedrock needed to ensure that prosperity is both generated and shared across communities. 

Cllr Eamonn O’Brien, Chair of the LGA, said:  

“The Prime Minister is right to identify that the imbalance between national and local government is holding back growth. But you cannot devolve power if the foundations are financially fragile. 

“If the Government wants national, regional and local growth, it needs to fix the local foundations first. Strong, capable and financially sustainable local authorities are essential to deliver on our shared priorities for health, housing and giving people every opportunity to thrive where they live. 

 “Genuine devolution needs to reach every part of the country and every level of local government. Our Autumn Budget submission sets out how, with sustainable funding and meaningful powers, local government can deliver the homes, skills, public services and opportunities for our communities."