Essex County Council responds to the provisional local government finance settlement announced by the Levelling Up Secretary last week. 

Levelling Up Secretary Michael Gove announced a funding package worth over £64 billion on December 18, aimed at supporting local councils.

The provisional local government finance settlement makes available almost £4 billion more funding for councils in England in 2024-25, an increase of 6.5% on 2023-24.

Six key areas of the financial package include:

• Maintaining the 'Funding Guarantee' to ensure every council in England sees at least a 3% increase in Core Spending Power before any local decisions are made around council tax. Core Spending Power is the measure of the resources available to local authorities to fund service delivery. In the provisional plan, Essex is set to see a 6.7% change in Core Spending Power from 2023-24 to 2024-25.
• Making available £1 billion in additional grant funding for social care in 2024-25 compared to 2023-24. The provisional settlement outlines that Essex could receive £105.5 million through the Social Care Grant for 2024/25.
• Allowing councils to increase council tax by up to 3% without a local referendum, with a further 2% for those responsible for adult social care services. If all councils put bills up by the maximum allowed, revenues are expected to increase by around £2.1 billion next year*.
• The most relatively deprived areas of England will receive 18% more per dwelling in available resources than the least deprived areas. 
• Increased Business Rate Revenues as a result of high inflation. Retained rates revenues and the Revenue Support Grant will increase. The Revenue Support Grant is a central government grant given to local authorities, used to finance revenue expenditure on any service. 
• A £406 million reduction in the Services Grant, while allocations of New Homes Bonus funding (£291 million), Improved Better Care Fund (£2,140 million) and the Rural Services Delivery Grant (£95 million) have been frozen in cash-terms.

Commenting on the provisional settlement, Councillor Chris Whitbread, Chancellor of Essex, said: "The headlines from the finance settlement for Essex are disappointing given the financial pressures facing councils, but are what we expected.

"There are significant challenges ahead. The impacts of high inflation and interest rates are still affecting families and demand pressures are still very much with us as a council. There will be tough choices in Essex, as there are in every budget.

"There is the ever-present need to continue to look after our most vulnerable; ours is an ever-ageing, ever-growing population with ever-more complex needs. But we are as committed to protecting Essex's vulnerable children and older people as ever.

"We will also need to continue to change the way we work. Providing services today in the way that we have been providing them for years is no longer an option.

"These are the challenges which we need to face and overcome as we finalise our budget for the coming financial year."

The consultation on the provisional settlement will be open for 4 weeks, closing on 15 January 2024.

The government will provide confirmation of the final local government finance settlement once the consultation has closed and all responses have been considered in early 2024.

*According to the Institute of Fiscal Studies, 19.12.2023.