Autumn Budget 2024: reaction from the sector

Local Government Lawyer rounds up the reaction from the sector to the Chancellor of the Exchequer’s Autumn Budget 2024.

The Chancellor of the Exchequer, Rachel Reeves, announced a raft of measures affecting local government, including plans to move towards multi-year settlements, a reduction in the number of grants and the announcement of an upcoming ‘English Devolution White Paper’.

A full summary of the key measures can be read here.

Cllr Louise Gittins, Chair of the Local Government Association

“It is encouraging that the Chancellor has responded today by providing £1.3 billion extra funding for the next financial year, which will help meet some – but not all - of the significant pressures in adult and children’s social care and homelessness support.

“Extra funding for children with special educational needs and disabilities is positive but also now needs to be followed by fundamental reform of the SEND system, focussing on improving inclusion in mainstream settings and writing off councils’ high needs deficits. We are also pleased the Government is providing additional funding to continue children’s social care reforms and to pilot a Kinship Allowance and will set out plans to promote early intervention to help prevent children and families reaching crisis point in the first place.

“Today’s Budget also includes some positive measures which we have called for, such as Right to Buy reform, funding for potholes, childcare, and affordable housing, which will help councils support early years, repair roads, and build new and improve existing homes. An extension to the Household Support Fund next year will also help councils provide welfare support to vulnerable households. These are all vital issues for our communities.

“This is a step in the right direction, but councils and the services they provide to their residents still face a precarious short and long-term future. The Government needs to give explicit clarity on whether councils will be protected from extra cost pressures from the increases to employer national insurance contributions.

“Only with greater funding certainty through multi-year settlements and more clarity on financial reform, can councils protect services, meet the needs of residents and work in partnership on the Government's priorities, from social care to housing, inclusive economic growth and tackling climate change. We look forward to continuing to work in partnership with the Government to address these issues for councils and communities.”

Cllr Tim Oliver, Chairman of the County Councils Network

“Today’s announcement of £1.3bn in new core funding for councils offers some welcome relief to the day-to-day financial pressures facing councils next year and will make budget setting for our councils an easier task for 2025/26.

“The additional investment of £1bn in special educational needs is also vital, and we are pleased the government recognises this as a down payment ahead of reforming the system to make it sustainable in the long-term.

“However this funding does not eradicate councils’ funding gap, and local authorities will incur significant additional expense due to the increase in the National Living Wage. Therefore, councils will have little choice but to raise council tax and still will need to take difficult decisions over services to balance their budgets.

“We now await December’s local government settlement to set out how this funding will be distributed. Ahead of the Spending Review and when consulting on proposed reforms to local government finance, the government should not seek to unfairly redistribute any existing resources next year which would worsen the financial challenge for some councils. It must also ensure that all council types receive a fair share of the £1.3bn of new resources, while ensuring that there is a fair approach to council tax equalisation.  

“Today’s Budget was also important in that the government pledged to reform both children’s services and SEND within the Spending Review next year. Considering they are both two of local government’s biggest financial pressures, reform of both is vital and urgent. Therefore it is necessary that reform is implemented within 12 months of the Spending Review, with councils given the powers and resource to fix the foundations in both service areas.

“The government has also confirmed its intention to explore local government reorganisation as part of its devolution and reform agenda. With several County Councils Network members becoming unitary authorities over recent years, we will work closely with the government to develop their proposals.”

Cllr Sam Chapman-Allen, Chairman of the District Councils’ Network

“The District Councils’ Network believes that wholesale reorganisation of local government is the last thing the country and our local communities need. It would be a huge distraction that would risk paralysing the delivery of local services in large parts of the country for the rest of the parliament. House building and economic development are among the areas that face disruption.

“Now is the time for district councils and local government to focus on delivering the pressing things that matter to our residents: jobs, homes, growth, better health and thriving local places. District councils want to work in partnership with the Government to achieve these outcomes which are at the heart of its national missions. It would be far better for the Government to empower us as part of the devolution agenda than to risk a counter-productive upheaval.

“Past experience suggests local government reorganisation is no panacea for saving money and improving the financial sustainability of local councils. Many new unitary councils have experienced deep financial difficulties.

"Evidence that new councils are more efficient and effective is inconclusive at best. There is a danger that cash-strapped new unitary councils would have no choice but to use money intended for value-adding services like leisure, wellbeing, social prescribing, homelessness prevention and community outreach to plug financial gaps in social care and children’s services.

“Any changes must meet the needs of local people. Imposing top-down reorganisation and abolishing district councils would move power away from local communities and would be the opposite to devolution.

“Compared to many other countries, England already proportionately has far fewer councils, each typically covering far more people. A top-down reorganisation would make us even more of an outlier, with even more powers being held far from local people.

“District councils are close to our communities. Because of this we’re trusted – our communities and businesses know that districts deliver when it comes to providing local services. This dependability could be at risk.

“None of this is to say that local government boundaries should be set in stone – viable proposals do sometimes emerge from local areas in response to communities’ changing needs. But in the spirit of devolution, it is essential that any such proposals genuinely emerge from local democratic bodies rather than be forced upon councils from Whitehall.”

Florence Eshalomi, Chair of the Housing, Communities and Local Government Committee

“To help tackle the housing crisis and enable families to get the homes they need, it’s vital we boost investment in affordable housing. I therefore welcome the Chancellor’s £500m top up of the Affordable Homes Programme and the scaling back of Right to Buy incentives which will help to drive investment in new social housing and the improvement of existing housing stock.

“The Chancellor’s announcement of £1 billion to accelerate the remediation of blocks with dangerous cladding is welcome news and we look forward to seeing more detail on how this will be driven forward.

“Notwithstanding the Budget’s announcement of a funding increase for local government, and additional money for areas such as SEND, local councils will continue to be buffeted by a variety of service pressures and significant financial challenges. As a Committee, we will be keen to look at the issues of local government finance over this Parliament and will closely scrutinise the Government's financial settlement for councils when that is announced later this year."

Jonathan Carr-West, Chief Executive, Local Government Information Unit (LGIU)

“The Chancellor billed this as an historically consequential budget of hard choices. That’s certainly true in many areas with £40bn of tax rises announced and significant changes to the government’s debt rules.

“For local government, however, it is a budget of choices deferred. It could have been worse – there’s an additional £1.3bn in funding including money for social care and additional funding for housing, and special educational needs: the very areas that are driving many councils to bankruptcy.

“But this extra funding is not even half the gap that councils currently face.

“The longer-tem change that the sector desperately needs is all deferred for now. We are waiting on the Local Government Finance Settlement, on the Devolution White Paper and on a broader redistribution of funding through a multi-year settlement from 2026-27.

“There were some welcome highlights: retaining 100% of right to buy receipts and integrated settlements for Greater Manchester and the West Midlands and possibly for other places in future.

“Is this a start? Yes. Is it enough? Not by a long shot. At least not yet. There’s a positive direction of travel set out, but there’s a long way to go and the pressure on council finances means there’s a real risk that some councils will not be able to hang on long enough to get there.”

Andy Smith, President of the Association of Directors of Children's Services

"The new government’s first budget has delivered some good news for children and young people. We know that the current SEND system is not fit for purpose, systematically failing to deliver the outcomes we want for our children and young people, while also proving financially unviable for councils. The £1 billion uplift in funding announced today is welcome news and will go some way to stabilising the system, but this must be accompanied by longer term reforms focussing on improving inclusion in mainstream schools, if we are to see real and meaningful improvement in children’s lives and outcomes. The £6.7 billon increase in capital investment in schools is much needed and will help ensure our children are learning in inclusive, appropriate, safe and secure environments.

"We have long warned that the perilous state of local government finances presents a significant threat to the way many of our vital services are managed and delivered. And while we welcome the £1.3 billion uplift in local government funding, and the one-year extension to family hubs funding, these are short-term measures, not long-term solutions. In order to ensure the stability of many vital and valued services, long-term, sustainable funding for local government and children’s services is the only solution. We now urge the government to use the spring budget to set out sufficient multi-year settlements for local authorities so they can effectively plan for the future."

Cllr Diarmaid Ward, Acting Leader of Islington Council

 "Following more than a decade of austerity and funding cuts, today’s Budget offers light at the end of the tunnel.

“We welcome the much-needed extension to the Household Support Fund that we have been calling for.

"While we will continue to make the case for a long-term scheme, today’s announcement nevertheless ensures that councils like ours can continue to provide support.

"At a time when the delivery of genuinely affordable housing is more important than ever, the news that councils will retain Right to Buy receipts directly supports our mission to provide safe, decent homes for local people."

Cllr Chris Whitbread, Leader of Essex Council

“While announcements of additional funding for key areas such as education, SEND, further investment in the Household Support Fund and more money for local government are of course welcome, they won’t go all the way in solving the financial challenges we currently face."

Peter Ware, Head of Government at UK and Ireland law firm Browne Jacobson

“Local authority leaders have for a long time called appealed to government to provide certainty over their funding settlements to help with long-term planning and for an end to competitive funding pots, which favour those councils best equipped for bidding.

“Now that the government has signalled an intention to move towards multi-year funding settlements that integrate previous grant funding pots, it’s crucial that local authorities get their act together so they’re able to demonstrate where funding is needed, as this will be crucial to their ability to access new public funding.

“The reason why such small amounts of Levelling Up Fund, Towns Fund and Shared Prosperity Fund money has been spent is because many councils haven’t known how to spend it effectively within the perimeters of those programmes.

“With greater scrutiny over value for the taxpayer on the horizon, government will want to target shovel-ready projects, or at least a clear path towards such schemes. This means local authorities must develop a coherent picture of the greatest investment needs within their areas, and a clear plan for how they would spend any new funding to improve the lives of their populations.”

Jonathan Cox, partner and head of social housing at law firm, Anthony Collins

“The decision to top-up the affordable housing programme (AHP) with funding to the value of £500 million, as trailed, is welcome, but 5,000 additional affordable homes is nowhere near enough to meet demand for affordable and social housing after years of shrinking supply. All eyes will be on what the AHP will be for 2026 onwards.

“There is a systemic problem here that the Government has so far chosen to ignore. Private sector property developers have been used to operating on 40% profit margins when selling Section 106 agreements to housing associations, and few are willing to accept less. Many housing associations have stopped bidding for such agreements, because they don’t stack up financially. Planning reforms – in particular, the removal of ‘hope value’ for development land – could make a difference, but even then, it would seem unlikely that developers would voluntarily drop their prices further.

“Fundamental changes are needed and many housing associations and other registered providers of social housing believe developers should be forced to sell their Section 106 agreements at cost (based on the cost of the build alone). If a figure can’t be agreed, then it should be adjudicated upon by an independent body in a similar way to fair rent legislation. Alternatively, local authorities could take a leaf out of Harrogate Borough Council’s book and set the price that registered providers are required to pay for affordable housing in Section 106 agreements in the local area.”

He later added: “With ambitious housing targets to meet in this parliament, the Government needs to do much more to support the delivery of social and affordable housing.  A more radical approach is needed to overhaul housing policy and force developers to change their ways by reducing their profit expectations on the sale of Section 106 agreements.”

Amardeep Gill, Partner and National Head of Public Sector at Trowers & Hamlins

"Councils will receive £1.3bn in additional grants, £600m for social care and a modest 1.5% increase for day to day spending - unlikely to be enough to prevent further s114 notices being issued in the coming months. However, with the removal of competitive funding, extra money for the Affordable Homes Programme and support for high streets - indications are that the sector is getting more support rather than continually shouldering the pain of a reduction in public spending, which can only be good news." 

Sam Townend KC, Chair of the Bar Council

“There are much-needed real terms increases for justice funding over this year and the next. It is welcome that the government recognises justice as a key public service.

“But there’s still a way to go. Justice has suffered a real terms cut of over 20% since 2010 and will need sustained funding through next spring’s spending review to move away from crisis mode.

“For the government to meet its ambitious targets to halve violent crime and violence against women and girls in a decade, equally ambitious policy thinking, coupled with long-term resource and capital funding, will be required.”