‘Challenging times ahead’ for council finances

The leader of Lincolnshire County Council claims the amount it’s likely to receive won’t cover additional costs which the authority is facing.

West Lindsey District Council have described their proposed allocation for 2025/26 – which is the same as the previous year – as “deeply disappointing”.

The government says councils nationwide will receive £69bn next year, an average increase of 3.5 per cent, and will try to fix an “outdated” funding system.

Councillor Martin Hill (Con), leader of Lincolnshire County Council, said: “For some years now, we have been short changed by government to the tune of about £120m a year.

“We had our settlement this week and it looks like the situation is going to get even worse.

“Previously we had a rural service delivery grant worth £9m which the new government has abolished altogether.”

He says that cities like Birmingham, which are better-funded per person, will get significant amounts of extra funding.

“Although we did get extra money from the government in this budget, it’s not enough to cover all our extra costs in adult social care and national insurance costs from our suppliers, an estimated £10m to £15m of NI costs, which will be passed onto us.

“It’s going to be quite a challenging time in future.”

Councillor Trevor Young (Lib Dem), who leads West Lindsey District Council, said: “This is the first time the council has not received an increase in government funding since 2019/20, which is an unacceptable outcome for our residents and communities.

“The government’s settlement fails to reflect the growing challenges and demands facing councils like ours.

“The current level of funding makes it challenging to support the vital services we deliver or the ambitions we have for improving the lives of our residents.

“We urge the government to recognise the unfairness of this decision and to deliver on its promise to provide the resources necessary to allow us to continue serving our residents effectively. We will not rest until West Lindsey receives the fair treatment it deserves.”

Jaclyn Gibson, City of Lincoln Council’s Chief Finance Officer, said their proposed funding was in line with expectations.

“The city council’s core spending power has increased by £4,000 on our 2023/24 settlement,” she said.

“This figure is in line with our budgeted expectations and our Medium Term Financial Strategy will be considered by the council’s Executive at its meeting at the end of January 2025.”

North Kesteven District Council has also been contacted about their funding.

A spokesperson for the Ministry for Housing, Communities and Local Government, who set council budgets, said: “We are injecting £69 billion of funding into council budgets across England to help them drive forward the government’s Plan for Change, a real-terms increase of 3.5% from 2024-25.

“We know that councils have suffered from short-term solutions, which is why we will work hand in hand with councils to reform this outdated system and fix the foundations.”

The Ministry said rural councils will get on average five per cent more funding.