The spending review, announced by the Chancellor on 25 November, contained significant announcements for local government. The Government confirmed that councils’ core spending power would rise by an estimated 4.5% in cash terms in 2021-22—worth £2.2 billion—a real-terms increase. This will support the services that the public relies on, including children’s and adult social care.
Alongside this, we announced a package of measures to support local government in its response to the pandemic. For 2020-21, Government have delivered on their commitment to apportion irrecoverable tax losses from this year, by confirming that they will compensate councils for 75% of such losses. For 2021-22 we will provide un-ring-fenced grant funding of £1.55 billion; £670 million in recognition of the additional costs of providing local council tax support resulting from increased unemployment; and we will extend the existing sales, fees and charges scheme to include the first three months of 2021-22. We have good reasons to be optimistic about overcoming the spread of the virus. Nevertheless, we will continue to keep the covid-19 package under review.
I intend to bring forward proposals for the allocation of this funding in the provisional local government finance settlement, before the Christmas recess.