Details of what councils will be expected to include in the productivity plans they are now required to produce have been outlined in the final local government finance settlement for 2024-25.
The plans, to be published by July 2024, should cover four key areas, according to levelling up secretary Michael Gove.
These include a “transformation of services to make better use of resources” and “opportunities to take advantage of advances in technology and make better use of data to inform decision making and service design”.
The productivity plans should also cover “ways to reduce wasteful spend within systems, including specific consideration of expenditure on consultants and discredited staff equality, diversity and inclusion programmes”. This does not include programmes designed to promote integration and civic pride, and counter- extremism.
The final area in the plans covers “barriers preventing activity that government can help to reduce or remove”.
Plans must be agreed by council leaders and members and published on local authority websites, together with updates on progress.
Gove confirmed that a new productivity review panel will be established, made up of sector experts including the Office for Local Government and the Local Government Association.
The final local government finance settlement for 2024-25 makes £64.7bn available to councils in England. This represents up to £4.5bn more in 2024-25 than the previous year, which the government said was an above-inflation increase of 7.5%.
The package includes the £600m in extra support, which offers £500m for social care, that was announced on 24 January.
The government said a sector-wide funding guarantee would ensure that all councils will see an increase in core spending power of at least 4% before any local choices on council tax – an increase from the 3% announced at the provisional settlement.
Councils will be able to increase council tax by up to 3% without a local referendum, with a further 2% for those responsible for adult social care services.
Gove confirmed additional council tax flexibilities for some failing councils, “reflecting the most serious of circumstances”.
He said the final settlement would provide local authorities “with the tools to support their local communities, continue to reform their services for the long-term, and to help communities prepare for the future”.
Gove noted that the most relatively deprived areas of England will receive 18% more per dwelling in available resource through the settlement than the least deprived areas.
The settlement includes a £15m increase in the Rural Services Delivery Grant, rising to £110m in 2024-25. The government will maintain its approach to other grants, such as continuing to increase the Revenue Support Grant in line with the Consumer Price Index.
Gove also reiterated the government position that “the ‘four day working week’ and other equivalent arrangements of part time work for full time pay do not deliver value for taxpayers”. Following consultation on levers in future financial settlements, the government will “carefully consider” responses as part of wider policy development, he said.
The Local Government Finance Report (England) 2024-25 can be read here with a key information table for local authorities available here.
A sector still at risk
Responding to the final local government finance settlement, Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities (SIGOMA), said the financial viability of the sector was still at risk, with many of the pressures councils face worsening by the time of the next settlement.
“Council finances have been pushed to the brink – more funding will be required within the next financial year to stop more councils from issuing section 114 notices, while many of our members will be forced to make impossible decisions about the vital local services they provide,” he commented,
“As recognised in the recent report from the Levelling Up, Housing and Communities committee, it is critical that the government tackles the £4bn funding gap for local government, and delivers serious reforms to fix the broken local government finance model.”
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