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

To ask the Secretary of State for Housing, Communities and Local Government, how many local authorities have paid back their full Exceptional Financial Support.

The recent Local Government Finance Settlement is our most significant step yet to make English local government more sustainable. Our reforms are delivering a fairer Settlement which puts funding where it is needed most. Before our reforms, only around a third of councils were given the funding that broadly matched their assessed need. Our reforms bring that up to nine in ten councils by 2028-29.

However, delivering reform will take time, and the government recognises the challenging financial context for local authorities as they continue to deal with the legacy of the previous flawed system. On 23 February government published details of Exceptional Financial Support provided to a number of councils to help them set balanced budgets for 2026-27. In line with approaches taken by previous governments, this support is provided through in-principle agreement to capitalisation directions. These provide councils with flexibility to manage some budgetary pressures either using capital receipts or using contributions from the revenue budget over time, supported by borrowing where necessary.

Councils are responsible for their own financial management, including funding any expenditure under the Exceptional Financial Support framework. When agreeing support, government has been clear that councils should aim to avoid or minimise additional borrowing by looking to use capital receipts to fund capitalised expenditure where possible, subject to appropriate value for money considerations and protection of community and heritage assets.

Government has also been clear that any support provided should be a time-limited and temporary measure, and local authorities should have clear plans to deliver the improvements and service transformation required to help them to return to financial stability over the multi-year Settlement.