Home Business News Councils to receive £500 million in funding, but ‘it’s not enough’

Councils to receive £500 million in funding, but ‘it’s not enough’

by Amy Johnson LLB Finance Reporter
24th Jan 24 3:52 pm

The Tory levelling up secretary, Michael Gove has said that councils in England will receive £500 million in funding as social care costs have soared.

Gove said that he is making an “exceptional provision” to help support councils as many could face bankruptcy.

Rishi Sunak has been threatened with a Tory rebellion in the House of Commons and in an unusual step the government has stepped in.

Speaking in the Commons Gove told MPs that the financial package for councils across England will add up to an overall increase in their budgets of up to £4.5 billion for 2025.

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Gove told MPs, “Councils have faced cost pressures as a result of high inflation. That is why the prime minister has prioritised halving it.

“The government has also listened to the sector and to the issues raised by members of the house. For this reason, I am today announcing a wide-ranging package of support for local government.”

Speaking anonymously, the chief executive of one of England’s largest city councils, seemed to suggest that the government could have provided the funding earlier.

They said, “Why didn’t they include this in the autumn statement. What’s changed? It’ll help but it’s not enough.”

Athis week an emergency meeting of council leaders was held as many councils are facing bankruptcy due to the rising costs of preventing homelessness.

Stephen Holt, Liberal Democrat leader of Eastbourne Borough Council told 50 council leaders in Westminster that Downing Street must step in to sop a “national crisis.”

Holt warned, “Simply put, without Government intervention to tackle the tremendous cost of temporary accommodation and homelessness, the next step for many councils of all stripes is emergency budgets and section 114 notices.”

Michael Jones, Labour leader of Crawley Borough Council, said rising costs and homelessness is “accelerating,” the then warned the town has now become “an asylum dispersal city by the back door” that is now driving “new demands” on them.

He said that the frozen funding regime, “is simply unjust and needs rectifying now.

“This crisis in temporary accommodation is a challenge that would have been insurmountable even for the most well-resourced councils at the best of times, so I don’t think it is over-dramatic given the pressures facing councils to tell the Government that they are presiding over the end of local government if they fail to take the urgent action needed.”

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