Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, whether his Department considered consulting local authorities or other stakeholders on extending the Recovery Grant.

Following extensive consultation and engagement, we are realigning funding distributed through the Local Government Finance Settlement with need and deprivation. We will target a greater proportion of grant funding towards the most deprived places which need it most, ensuring the best value for money for government and taxpayers.

These updates will account for local circumstances, including for different ability to raise income locally from council tax, and the variation in the cost of delivering services, including between rural and urban areas. By using the most up to date data available, the government will be able to assess local authorities' relative demand for services more effectively. This includes using the most up-to-date 2025 Indices of Multiple Deprivation in our assessment of need.

We introduced the £600 million Recovery Grant in 2025-26 to support the most deprived local authorities which are least able to fund their own services through income raised locally. After years of funding cuts to local government, in which the most deprived places suffered the most, the recovery is not over. Following a large number of representations on the importance of Recovery Grant funding, the government has consulted on its plans to maintain the Recovery Grant across the multi-year Settlement, to enable these places to continue their recovery.

The government is considering the responses received following the consultation of the Provisional Local Government Finance Settlement 2026 to 2027 and will set out a position when the final Settlement is published in early February.