06 Dec 2023

Local government finance policy statement 2024 to 2025

The Government have published a Local government finance policy statement 2024 to 2025 ahead of the upcoming settlement.

In it, they set out some key principles. 

  • Core funding (the Revenue Support Grant) will be increased by the Consumer Price Index (CPI) this year.
  • There will be a core council tax referendum limit for local authorities of up to 3% and a referendum limit on adult social care prcept increases at 2%. We have previously expressed concerns about the regional disparities that relying on local tax funding could generate and the fact that, given cost of living pressures, some Councils may choose not to increase funding through these routes.
  • Social Care grant funding will increase as follows:
    • an additional £692 million through the Social Care Grant bringing the overall size of the grant to £4,544 million [as announced in the Autumn Statement 2022].
    • an additional £200 million will be distributed in 2024 to 2025 through the Discharge Fund to support timely and safe discharge from hospital into the community by reducing the number of people delayed in hospital awaiting social care. This will bring the overall size of the local authority component of the Discharge Fund to £500 million.
    • the Discharge Fund will be in addition to the existing improved Better Care Fund, for which the quantum of £2,140 million and the distribution will remain the same as in 2023-24.
    • £1,050 million in 2024 to 2025 will be distributed for adult social care through the Market Sustainability and Improvement Fund (MSIF), which continues to include £162 million per year of Fair Cost of Care funding. It also includes £205 million MSIF - Workforce Funding, a 2-year fund announced in July 2023 which will be rolled into the existing MSIF. In total, the combined MSIF and MSIF Workforce Fund are worth £123 million more than in 2023 to 2024.

This suggests Adult Social Care Grant Funding will be £1,015 million more than in 2023/24 - bringing the total (including the Better Care Fund) to £8,234 million.

Whilst this appears to be a substantial, National Living Wage is increasing 9.8%, and the sector continues to face recruitment challenges and other cost pressures (such as for fuel). The Health Foundation estimated that to meet demand, improve access and cover the full cost of care £8.4 billion additional funding would be required in 2024/25. 

Related topics