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

To ask the Secretary of State for Housing, Communities and Local Government, what consideration was given to providing additional financial support to local authorities that will have large reductions in Government funding.

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 has been clear that we will support local authorities to manage their updated funding positions through a package of transitional arrangements, including by introducing changes over the multi-year Settlement and protecting councils’ income, including locally retained business rates growth. These arrangements will support councils to their new allocations in a sustainable way. Provisional multi-year funding allocations were published at the provisional Local Government Finance Settlement on 17 December 2025, including details on the package of transitional support for councils who would otherwise see their funding fall as a result of the introduction of the reformed system.

The government recognises the challenging financial context for local authorities as they continue to deal with the legacy of the previous flawed system. We will therefore continue to have a framework in place to support those in the most difficult positions. We also recognise that local authorities are continuing to face significant pressure from the impact of Dedicated Schools Grant (DSG) deficits on their accounts and that local authorities will need continued support during the transition to a new Special Educational Needs and Disabilities (SEND) system. We will provide further detail on our plans to support local authorities with historic and accruing deficits and conditions for accessing such support later in the Local Government Finance Settlement process. The Department for Education will set out plans for reform of the SEND system in the upcoming Schools White Paper, building on the work already done to create a system that’s rooted in inclusion, where children receive high-quality support early on and can thrive at their local school.

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. Between now and the end of the multi-year Settlement, there will be another Spending Review which will determine arrangements for 2029-30 and beyond.