Autumn Budget 2024: Key measures

October 30, 2024

Local Government Lawyer rounds up some of the key announcements and policy measures in the Chancellor of the Exchequer’s Autumn Budget 2024 affecting the sector.

Click here for reaction to Rachel Reeves' plans.

Devolution, core spending power, public sector reform

Core spending power – This will be increased by around 3.2% in real terms in 2025-26, with £1.3 billion of new grant funding including at least £600 million new grant funding for social care.
Funding allocations – The approach to funding allocations within the Local Government Finance Settlement will be reformed by redistributing funding to ensure that it reflects an up- to-date assessment of need and local revenues.
Local government settlement – The Local Government (LG) settlement provides total DEL (Departmental Expenditure Limits) funding of £11.4 billion in 2024-25, and £14.3 billion in 2025-26. "This is equivalent to an annual real-terms growth rate of 10.2% from 2023-24 to 2025-26. This will support local authorities to continue delivering the essential services they provide."
Towards multi-year settlements – "The government recognises the pressures that local authorities are facing and will have a framework in place to support those in most difficulty. The government is also committed to pursuing a comprehensive set of reforms to return the sector to a sustainable position." This will include reform of the approach to allocating funding through the LGFS, starting with a targeted approach to allocating additional funding in 2025-26, ahead of a broader redistribution of funding through a multi-year settlement from 2026-27. The government will set out further details through an upcoming local government finance policy statement."
English Devolution White Paper – The government is working closely with local leaders on the upcoming English Devolution White Paper. “This will set out the government’s plans to widen devolution to more areas and deepen the powers of existing mayors and their combined authorities, ensuring they have the tools needed to boost economic growth.”
Granting borrowing powers for newly established Mayoral Combined (County) Authorities – At Autumn Statement 2016, it was announced that Mayoral Combined Authorities would be given powers to borrow for new functions subject to a cap agreed with HM Treasury. “In line with this approach, the government will legislate to provide the North East Combined Authority; East Midlands Combined County Authority; and York and North Yorkshire Combined Authority with borrowing powers across the full range of their functions.”
Integrated settlements for Mayoral Combined Authorities – The government is implementing integrated settlements for Greater Manchester and West Midlands Combined Authorities from the start of the 2025-26 financial year, and for Liverpool City Region Combined Authority and the North East, South Yorkshire and West Yorkshire Mayoral Combined Authorities from the start of the 2026-27 financial year. “Noting its unique devolution arrangement, the government will also explore how an integrated settlement could apply for the Greater London Authority from 2026-27.”
Extend 100% business rates retention for the West of England Combined Authority, Cornwall and Liverpool City Region for 2025/26 – The government is extending 100% business rates retention arrangements for West of England Combined Authority, Cornwall and Liverpool City Region for 2025-26.
Extend 67% business rate retention for the Greater London Authority for 2025-26 – The government is extending 67% business rates retention arrangements for the Greater London Authority for 2025-26.
Extending the Public Works Loan Board Housing Revenue Account rate – The government is extending the discounted Public Works Loan Board Housing Revenue Account lending rate until March 2026. “This will support local authority financing of capital expenditure on social housing in their Housing Revenue Account.”
Barnett – The devolved governments will receive an additional £6.6 billion through the operation of the Barnett formula in 2025-26. This includes £3.4 billion for the Scottish Government, £1.7 billion for the Welsh Government and £1.5 billion for the Northern Ireland Executive. “This will enable substantial investment into schools, housing, health and social care, and transport across Scotland, Wales and Northern Ireland.”
Public Sector Reform and Innovation Fund – This fund will support the development of a new approach to improving public services. The Budget allocates £165 million of this to a range of projects in 2025-26, including to support foster carer recruitment and planning reform. In addition the Budget allocates £100 million of this over the next three years to deliver innovative projects, partnering with Mayors and local leaders, and developing new approaches to public service reform with a focus on experimentation and learning. "This will
complement and inform ongoing reform programmes and activities being delivered by departments."

Children’s Services, Education

SEND funding – Phase 1 of the Spending Review provides a £1 billion uplift for SEND and alternative provision funding, equivalent to 6% real growth. “This is an important step towards realising the government’s vision to reform England’s SEND provision to improve outcomes and return the system to financial sustainability, which will be built on through Phase 2.”
Children’s social care, kinship care – The government will provide over £250 million in 2025-26 to continue to test innovative measures to support children and reduce costs for local authorities. This includes £44 million of new funding to pilot a Kinship Allowance as well as to create hundreds of new foster placements, enabling more children to stay in family environments. The government will set out plans for fundamental reform of the children’s social care system in Phase 2 of the Spending Review, "including promoting early intervention to help children stay with their families where possible, and fixing the broken care market."
School rebuilding – Capital investment will include £1.4bn for the school rebuilding programme. This includes plans for 100 projects to start delivery across England next year, "reaffirming the government’s commitment to improve the school estate by rebuilding 518 schools in total through the programme". There will be £2.1 billion to improve the condition of the school estate, an increase of £300 million compared to 2024-25.
Children's home estate – There will be £90 million to renovate and expand the children’s home estate.

Public finances

Office for Value for Money – The government is formally launching the Office for Value for Money, with the appointment of an independent Chair. The Office will support Phase 2 of the Spending Review conducting an assessment of where and how to root out waste and inefficiency, undertaking value for money studies in specific high-risk areas of cross-departmental spending and scrutinising investment proposals to ensure they offer value for money.
Appointment of Covid Corruption Commissioner – The government will shortly appoint a Covid Corruption Commissioner. They will lead work to recover public funds from companies that took unfair advantage of the COVID-19 pandemic.

Housing, planning

Reducing Right to Buy discounts – Reducing discounts on the Right to Buy scheme, and enabling councils in England to keep receipts generated by sales, “will deliver on the government’s commitment to protect existing council housing stock and boost council capacity to ensure that vital social housing is available to those who need it most”.
Social rent settlement – The government is consulting on a new long-term social housing rent settlement of CPI+1% for 5 years “to offer certainty for social housing providers and give the sector the confidence to build tens of thousands of new social homes in England. The government will be consulting on whether further measures could provide even greater certainty.”
Spending to prevent homelessness – £233 million of additional spending will be provided in 2025-26 to prevent homelessness, taking total spending to £1 billion in 2025-26. "This will help to prevent rises in the number of families in temporary accommodation and help to prevent rough sleeping."
Planning reform – "Recognising that reform of the planning system is central to any plans to deliver 1.5 million new homes", over £50 million of new spending will be provided to expedite the planning process, including for Nationally Significant Infrastructure Projects. "Funding will foster a pipeline of planners of the future by recruiting an additional 300 planners; and boost and upskill local planning authority capacity to deliver the government’s wider planning reform agenda, including changes to the National Planning Policy Framework. It will also accelerate large sites that are stuck in the system."
Nutrient neutrality: The Autumn Budget confirms the allocation of £47 million to support the delivery of up to 28,000 homes "that would otherwise be stalled due to nutrient neutrality requirements".

Local growth, high streets

Local growth funding reforms – The government will set out its long-term vision for local growth funding in Phase 2 of the Spending Review. “The government is continuing to invest in programmes which are important to growth and provide stability for local leaders and investors.”
Regional growth strategy – The government is setting out the next steps for delivering its strategy for regional growth, across investment, devolution and local growth funding reform.
City and Growth Deals – Proceeding with the Mid South West and Causeway Coast and Glens City and Growth Deals. The Budget confirms £162 million investment over 15 years, subject to value for money assessments of business cases, supporting economic growth in Northern Ireland’s rural regions. The government also confirms £25 million for the 10-year investment in the Argyll and Bute City and Growth Deal to drive inclusive and sustainable economic growth, subject to a value for money assessment of business cases.
Future of Freeports and Investment Zones – The government is confirming funding for Investment Zones and Freeports across the UK, announcing the approval of the East Midlands Investment Zone to support advanced manufacturing and green industries, and confirming that five new customs sites will be designated in existing Freeports shortly. The government will also work to ensure the Freeports policy model aligns with the national Industrial Strategy.
UK Shared Prosperity Fund – This will be continued but at a reduced level for a further year, providing £900 million; "this transitional arrangement will allow local authorities to invest in local growth, in advance of wider funding reforms."
Business rates on high streets – The Government intends to introduce permanently lower business rates multipliers for high street retail, hospitality and leisure properties (RHL) from 2026-27. To make sure this tax cut is fiscally sustainable, the government intends to fund it through a higher multiplier for the most valuable properties (those with rateable values above £500,000). "This measure will provide certainty and support for the high street."