Local authorities: Cash and care must go hand-in-hand

The chancellor's Budget put fiscal devolution firmly at the centre of the Government's vision for local growth, with plans to move towards full local retention of business rates and give places a greater stake in the proceeds of economic success.These reforms are a significant and welcome step in the right direction. Giving councils a stronger stake in growth should support long-term planning, unlock investment and create new opportunities for local communities. But the success of the reforms will depend on the detail.As the Government develops the transition to greater local retention, it must ensure places starting from very different economic positions are treated fairly, with strong equalisation built into the system so that areas with weaker tax bases and higher levels of need are not disadvantaged.While the Special Interest Group of Municipal Authorities (SIGOMA) supports devolution in principle, it cannot mean transferring more financial risk onto councils without recognising these different starting points.The chancellor was clear that further reforms will be set out later in this Parliament. The challenge now is making sure that fiscal devolution works for every part of the country.Greater local freedom must be matched by a sustainable approach to funding essential services, particularly in places where demand is highest. Councils must also share fully in the benefits of devolution and remain central partners in decisions about growth, investment and regeneration.That will be especially important as the Government turns its attention to addressing social care and Special Educational Needs and Disabilities (SEND) – two of the biggest long-term challenges facing public services.The Prime Minister has rightly identified social care reform as a priority. But the councils facing some of the greatest demand for these services are often those with the least ability to raise the money needed to fund them.Across many of the communities represented by SIGOMA, deprivation means particularly acute demand for adult and children's social care, SEND and other essential services. Yet these same places typically have weaker council tax and business rates bases, limiting their ability to generate income locally.This imbalance must be recognised in any credible approach to the future funding of local government.The same principle must underpin social care reform. Councils cannot plan their workforces, invest in prevention, or maintain stable local care markets when they are continually looking towards the next funding settlement. Nor can they afford to neglect preventative services that help people before their needs become more complex and which can ease pressure on the system over time.The same pressures are evident in SEND. Councils want children and families to receive the right support as early and as close to home as possible. But rising demand, increasing costs and pressure on local provision have left the system under enormous strain, particularly in more deprived communities.The Government is right to recognise the need for fundamental reform. But any reforms must address both the accumulated financial pressures facing councils and the underlying factors driving rising demand and costs.The answer cannot be a return to short-term fixes. Councils need the certainty to plan ahead, invest in prevention and build services around the long-term needs of their communities, rather than the next funding settlement.The Government has taken important steps in that direction through the 2026-2029 Local Government Finance Settlement, with additional funding and a multi-year settlement improving stability for SIGOMA councils and communities. However, these measures must be the foundation for wider reform in future, not the end of the conversation.SIGOMA will explore these questions in greater detail in our forthcoming manifesto, to be published later this month. Building on the progress made through recent funding reforms, it will set out proposals to ensure that funding reflects deprivation, demand and councils' ability to raise resources locally, address the long-term pressures facing social care and SEND, strengthen the role of councils within devolution arrangements and support inclusive growth in communities facing the greatest barriers to prosperity.Our aim is to build a local government finance system that is fair, stable and sustainable, providing councils with the resources, certainty and flexibility they need to deliver local services, support their communities and plan for the future. Our manifesto will set out the reforms needed to achieve that goal.Chris Cooke is mayor of Middlesbrough and chair of SIGOMA (the Special Interest Group of Municipal Authorities)

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Local authorities: Cash and care must go hand-in-hand

By Chris Cooke | 12 November 2026

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