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

To ask the Secretary of State for Housing, Communities and Local Government, what assessment his Department has made of the adequacy of the balance of Recovery Grant funding between urban and rural authorities.

The government published the Local government finance policy statement 2026-27 to 2028-29 and response to the Fair Funding Review 2.0 on Thursday 20 November, which set out the government's plans to introduce a fairer and evidence-led funding system. The government also published the Provisional Local Government Finance Settlement 2026-2027 to 2028-2029 on Wednesday 17 December 2025.

The government is committed to tackling the issues that matter to rural communities. Our updates will account for local circumstances, including the variation in cost of delivering services, such as between rural and urban areas. In addition, we are using updated deprivation data in our assessment of need, to help ensure that deprivation in rural areas is captured more accurately.

The government introduced the £600 million Recovery Grant in 2025-26 to support those local authorities facing higher need and demand for services, i.e. higher levels of relative deprivation, and which are least able to fund their own services through income raised locally. A number of predominantly rural authorities, or urban authorities with significant rurality, received the Recovery Grant. Following a large number of representations on the importance of this funding, the government confirmed that we would maintain all existing Recovery Grant allocations from 2025-26 across the multi-year Settlement; and we will also provide a Recovery Grant Guarantee to upper tier authorities which were in receipt of the Recovery Grant.

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.