In the final local government finance settlement for 2024-25, councils have been mandated to produce productivity plans by July 2024. These plans are expected to encompass four key areas, as outlined by levelling up secretary Michael Gove.
According to Gove, the productivity plans should concentrate on transforming services to optimize resource utilization, harnessing advancements in technology and data for informed decision-making and service design, reducing inefficient expenditure, and addressing any obstacles hindering government-supported activities.
Additionally, the plans must be approved by council leaders and members and made publicly available on local authority websites, with regular updates on progress.
To facilitate the implementation of these productivity plans, a new productivity review panel will be formed. This panel will comprise sector experts, including the Office for Local Government and the Local Government Association.
The final local government finance settlement for 2024-25 allocates £64.7bn to councils in England, representing an increase of up to £4.5bn from the previous year. This rise, amounting to 7.5%, surpasses inflation and incorporates an additional £600m in support, with £500m specifically allocated for social care.
Councils will also have the discretion to raise council tax by up to 3% without a local referendum, with an additional 2% for those responsible for adult social care services. Additional council tax flexibilities are available for struggling councils, reflecting dire circumstances.
According to Gove, the settlement aims to equip local authorities with the necessary resources to sustain their communities, continue overhauling their services, and prepare for the future. It also guarantees that the most relatively deprived areas of England will receive 18% more per dwelling in available resources than the least deprived areas.
Furthermore, the settlement incorporates a £15m increase in the Rural Services Delivery Grant, scaling up to £110m in 2024-25. The government will also maintain its approach to other grants, such as increasing the Revenue Support Grant in line with the Consumer Price Index.
With regards to forthcoming financial settlements, the government has reaffirmed its stance on the ‘four day working week’ or similar arrangements, asserting that they do not provide value for taxpayers. Future policy development will take into account feedback from consultations on financial settlement levers.
For further information, the Local Government Finance Report (England) 2024-25 is available for reference.
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