Gedling Borough Council has called on the Government to provide ‘fairer funding’ after it was announced how much cash struggling local authorities will get this year.
Each year the Government tells councils how much it plans to give them in central funding to help run vital services such as social care, homelessness support, housing, bin collections, leisure centres and more.
The Labour Government said on December 18 it would be increasing spending power by six per cent in cash terms in 2025/26, or 3.5 per cent in real-terms over the previous year.
It is attempting to correct what it says is the “inefficiency of the current system” by putting councils in the most deprived areas on a more stable footing.
This policy has proven beneficial for urban and city councils, including Nottingham City Council, but county, district and borough councils have been left reeling.
The Special Interest Group of Municipal Authorities (SIGOMA), which Nottingham City Council is a part of, described the settlement for its members as fair, while providing “welcome relief to the most deprived areas after a decade of disproportionate cuts and increases in demand”.
However county, district and borough councils have expressed dismay at the settlement.
The County Councils Network (CCN) says the Government is “cherry picking” funding towards urban and city councils, while the District Councils Network (DCN) said its member authorities may be forced to cut services due to what is has described as a “tough” settlement.
According to the DCN, district councils are promised a 0.3 per cent cash increase, but it says this is dependent upon council tax increases and does not reflect many of the rising costs councils face.
The DCN adds: “District councils have already faced a real-terms funding cut of 21 per cent between 2010/11 and 2024/25.”
Further concerns have also been raised over added pressures from the rise in employer National Insurance Contributions.
Leader of the Gedling Borough Council, Cllr John Clarke (Lab), said: “We have reviewed the provisional Local Government Finance Settlement for 2025/26, and while we welcome the certainty it provides for the coming year, we are aware that the cash increase for borough and district councils is low.
“The average 0.3 per cent increase in Core Spending Power for district councils is significantly below the sector average of 6 per cent.
“Gedling Borough sits even lower than the 0.3 per cent. This minimal uplift does not reflect the rising costs we face or the increasing demand for the vital services we provide.
“Despite these challenges, we remain committed to delivering high-quality services for our residents and ensuring the efficient use of resources.
“However, we urge the Government to consider the pressures on district and borough councils and provide fairer funding in future settlements to protect essential services and support our communities.”
For Nottingham City Council, the settlement for 2025/26 has been welcomed.
The Labour-led authority is facing a £69m budget gap for 2025/26, rising to a cumulative £172m over the next three years.
Cllr Neghat Khan (Lab), the leader of the council, told the Local Democracy Reporting Service: “We’re pleased that the Government has recognised the huge pressure that council budgets have been under over the last decade and more, particularly cities like Nottingham.
“We welcome the additional £30-plus million we have received in the Local Government Settlement to help us manage the ever increasing demand we face for vital services such as social care for adults and children, tackling homelessness and special educational needs.”
Nottinghamshire County Council were contacted for comment about the settlement, but did not respond.
