Title

AUTUMN BUDGET

Budget: LGR confirmed in high tax, high spend Budget

Local government reorganisation – and the efficiency savings it will make – have been confirmed in Budget documents.

Rachel Reeves ©parliamentlive.tv

Rachel Reeves ©parliamentlive.tv

Local government reorganisation – and the efficiency savings it will make – have been confirmed in Budget documents.

Plans for unitarisation, which will be detailed in an English devolution White Paper, were revealed exclusively by The MJ earlier this week.

While there was no mention of reorganisation in chancellor Rachel Reeves' speech, the small print of the Budget documents read: ‘The upcoming English devolution White Paper will set out more detail on the Government's devolution plans, including on working with councils to move to simpler structures that make sense for their local areas, with efficiency savings from council reorganisation helping to meet the needs of local people.'

Overall, local government budgets for 2025-26 will increase to £14.3bn, including additional grant funding of £1.3bn – at least £600m of which has been earmarked for social care.

Budget documents read: ‘Together with council tax flexibilities and locally-retained business rates, this will provide a real-terms increase in total core spending power in 2025-26 of around 3.2%.'

However, the employers' National Insurance rise is expected to swallow up approximately £270m of the funding, with minimum wage increases also impacting on budgets.

The Office for Budget Responsibility warned: ‘Pressures on local authority finances remain a substantial risk to our forecast. Local authority spending has fallen from 7.4% to 5% of gross domestic product (GDP) between 2010-11 and 2023- 24 and is forecast to continue falling to 4.8% of GDP by 2029-30.' 

There was a further £1bn to ease the burden on special educational needs and disability, £50m for planning, and homelessness and rough sleeping will receive additional funding of £233m.  

In addition, there was confirmation of a further year of the UK Shared Prosperity Fund and £1bn in levelling up funding.

There was a commitment to ‘extending and deepening' English devolution by ‘building mayoral capacity' on growth, with an end to funding for Local Enterprise Partnership functions, while Greater Manchester and the West Midlands will get integrated settlements

 

AUTUMN BUDGET

LGR pause and review: what councils need to know

By Christopher Kerr | 18 September 2026

Christopher Kerr looks at the immediate issues and future concerns councils need to address following the pause in local government reorganisation.

AUTUMN BUDGET

Government faces possible legal challenge over funding cuts

By Martin Ford | 18 September 2026

The Conservative Party has instructed lawyers to look into mounting a legal challenge over cuts to council funding.

AUTUMN BUDGET

Madchesterism: Putting music at the heart of devolution

By Tom Kiehl | 17 September 2026

New research makes clear the next phase of devolution is an opportunity to treat music as part of the economic, social and physical part of local communities...

AUTUMN BUDGET

MJ Regeneration: A Budget to build from

By David Blackman | 17 September 2026

Chancellor John Healey’s commitment to regional economic growth predates the Burnham Government by about 30 years, says David Blackman. His Budget will need ...

Heather Jameson

Popular articles by Heather Jameson

-->