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'Fairer' local government funding settlement divides opinion

Suffolk County Council will see its core spending power rise by 24% over this Parliament under the government's funding settlement, but the authority says this masks a £6 million budget gap and assumes councils will raise council tax to the maximum every year.

Endeavour House and Grafton House in Ipswich
(Oliver Rouane-WilliamsIpswich.co.uk)

Why it matters: The government's provisional local government finance settlement has sparked sharply contrasting responses locally, with Ipswich MP Jack Abbott hailing it as ending years of austerity, whilst the county council warns the funding formula shift towards metropolitan areas has left rural counties worse off.

The big picture: Under the settlement, Suffolk County Council's core spending power will rise from £714 million in 2024-25 to £886 million by 2028-29, with spending power per resident increasing from £917 to more than £1,120 per head.

Jack Abbott said Ipswich Borough Council will receive a 19% increase, with core spending power rising by £5.1 million over this Parliament, and spending power per resident rising from £204 to £243 per head by 2028-29.

However, the county council is unhappy with the funding, saying its current understanding is that it now faces a £6 million budget gap, which is £3.5 million worse than previously forecast.

What they're saying: Abbott said: "Since being elected as the MP for Ipswich, I have urged the government to fund our local councils and services more fairly. As a former Suffolk county councillor, I know the consequences of central government starving our local communities of funding."

"After 14 years of Conservative austerity, where I campaigned against brutal cuts to our local services like children's centres, Labour is putting money back into our local services."

He added that the settlement would make a real difference to people's everyday lives, from better buses and smoother roads to cleaner streets and stronger local services.

The other side: Cllr Richard Smith MVO, Suffolk County Council's deputy leader and cabinet member for finance, economic development and skills, said: "We are deeply disappointed by the government's provisional local government finance settlement."

"This is despite government assumptions that councils will raise council tax by the maximum amount every year, and the introduction of a so-called 'fairer' funding model. In reality, the government has shifted resources towards metropolitan areas at the expense of rural counties like ours, while injecting very little new money into the system."

He added: "This settlement makes an already difficult financial position even more challenging. We will continue to press for a genuinely fair funding formula that properly reflects the needs and costs of delivering services in rural communities."

For context: The settlement is the first multi-year local government funding deal in over a decade. Labour Secretary of State for Housing, Communities and Local Government Steve Reed said it represented "a turning point, a chance to turn the page on a decade of cuts and callousness".

Jack Abbott said the funding injection includes over £30 million to improve bus services across Suffolk and more than £219 million for highways maintenance to fix potholes and resurface roads. SEND provision received nearly £10 million to deliver new specialist places, he added.

The bottom line: While the government presents the settlement as a major funding boost for Suffolk, the county council argues it creates a larger budget shortfall than expected and favours urban areas over rural counties.

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