Levelling up funding
©Sharad Raval

Councils across England are set to receive £53.9bn in ‘Levelling up’ funding for the next upcoming financial year, including an additional £1bn of funding for social care, according to the latest government announcement

The package represents the largest cash-terms increase in grant funding in 10 years and makes an extra £3.5 billion available compared to 2021-22, including a grant worth £822 million for councils to spend as they see fit to best meet local needs.

The funding set out by the Department for Levelling Up, Housing and Communities will enable councils to continue to deliver vital services and look after the most vulnerable in their communities.

The government funding will also support councils to play a significant role in the government’s transformative levelling up agenda as the country builds back better from the pandemic.

This settlement will also protect residents from excessive council tax increases. From next year, the amount of council tax that can be increased without a vote has been reduced to 2%, with an extra 1% for councils with adult social care responsibilities.

‘Build back better from the pandemic’

Secretary of state for Levelling Up Michael Gove said: “Councils continue to deliver for their communities and have a major role to play in our central mission of levelling up the country.

“Today’s funding package represents a real-terms increase from last year’s settlement and will make sure councils can improve vital frontline services, support vulnerable people and protect residents from excessive council tax rises as we build back better from the pandemic.”

The Provisional Finance Settlement includes:

  • More funding for social care:

The government is making more than £1bn of additional funding available for social care, ensuring councils can improve conditions for carers and those in need.

In addition to this, £162m of funding will be allocated to prepare councils for social care reform and to help move towards providing a fair cost of care.

  • Preventing excessive council tax rises:

Residents will continue to have the final say over excessive council tax increases. From next year, the amount council tax can be increased without a vote has been reduced to 2%, with an extra 1% for councils with adult social care responsibilities.

  • New homes bonus:

£554m has been allocated to English councils in 2022/23.

This brings the total amount of funding awarded under the new homes bonus to £10bn, which has seen over 2.3 million additional homes being built, of which more than 560,000 are affordable homes.

  • Lower tier services grant:

Providing £111m to councils with responsibility for services such as homelessness, planning, recycling and refuse collection and leisure services.

  • Continued support for rural areas:

The government recognises rural areas can face additional cost pressures, and the £85m rural service delivery grant will continue to be provided.

  • Business rates retention pilots:

Continuing the 100% Business Rates Retention pilots in Cornwall, Greater Manchester, Liverpool, West Midlands and West of England and 67% business rates retention for London councils, enabling them to control more of the money they raise locally.

  • Revenue support grant:

An uplift to the revenue support grant in line with inflation, worth over £70m.

In line with the announcement, a further £45m of additional funding has been announced to improve the timely completion of local audits over the next 3 years to support local councils with increased costs relating to new audit requirements.


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