The core spending power of councils in England is set to grow by up to 11% in real terms over the next two years, according to analysis from the Institute for Fiscal Studies (IFS).
Researchers at the IFS have examined the figures released by the Department for Levelling Up, Housing and Communities (DLUHC) as part of the local government finance policy statement. Figures will be confirmed next week when DLUHC publishes the local government finance settlement.
The IFS found that councils’ spending power is set to increase by up to 5.4% in real terms next year, and a further 5.8% the following year, with bigger average rises in more deprived areas. This takes into account the confirmed new grant funding for social care, the postponement of planned care reforms and bigger council tax increases.
“Councils had been bracing for another difficult few years, but the local government settlement will be much better than most were expecting, with spending power set to outpace inflation over the next two years,” said Kate Ogden, senior research economist at the IFS.
“Extra funding for social care comes with an expectation councils will substantially increase the number of care packages on offer, helping discharges from hospital, but difficulties recruiting and retaining care workers will make delivering this a challenge.”
She added that the focus on propping up social care also meant that district councils would get less help in the face of rising costs.
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