Last Updated on December 18, 2025

The Ministry of Housing, Communities and Local Government has published its latest provisional local government finance settlement. The settlement confirms that it will be the first multi-year settlement in a decade, running from 2026/27 to 2028/29.

The elements of the settlement concerning adult social care are as follows:

• An additional £4.6bn is being available for adult social care in 2028/29 compared to 2025/26, which includes the £500m for the first fair pay agreement for adult social care.
• Government is consolidating key adult social care grants to local government into an non-ringfenced Revenue Support Grant and distributing this using a new Fair Funding Assessment.
• The Local Authority Better Care Grant will remain ringfenced and will be pooled into the Better Care Fund.
• The Department of Health and Social Care will set out adult social care notional allocations for each local authority over the multi-year settlement intended as a reference point to support local councils in decisions on adult social care spending.

Commenting on the publication of the settlement, Professor Vic Rayner OBE, Chief Executive Officer at the National Care Forum (NCF), said, 'We welcome the publication of the first multi-year settlement in a decade as this should enable local authorities to better enable a more strategic approach to adult social care commissioning. Moves to implement a fairer funding system for local government based on updated data on needs and costs are also welcome. However, we recognise and share the concerns raised by many within local government around redistribution and the very real risks present in the delivery of social care, particularly in parts of the country where people are already finding it difficult to access care and support services.

'Our biggest concern with [the] announcement is the decision to un-ringfence the majority of adult social care grants to local government, including the £500m committed specifically for the fair pay agreement for care workers. The consolidation of key adult social care grants into a non-ringfenced Revenue Support Grant, puts adult social care funding at enormous risk due to wider public and political pressures, combined with commitments at a local level. It is also unclear how a nationally negotiated fair pay agreement can be agreed with any confidence when local allocations are not protected for this purpose. Without further details of how performance against "notional allocations" will be determined, it is difficult to see that these allocations offer any more than cold comfort in the face of the already challenging funding situation of local government as a whole.'

Cllr Louise Gittins, Chair of the Local Government Association (LGA), said, 'It is good that Government has acted on LGA calls to provide multi-year financial certainty to councils and a streamlined funding system. While funding levels have risen over the last few years, budget-setting will be another hugely challenging task for many councils again next year. An increase in overall funding remains needed to ensure the financial sustainability of councils and our local services.

'All councils need to be protected from real-terms cuts next year and have adequate funding to fully meet spiralling cost and demand pressures. Alongside a significant boost in resources, it is critical that Government works with councils to reform key services, such as SEND and adult social care, and undertakes a cross-party review of options to improve the wider local government finance system.

'We remain concerned by the number of councils having to use unsustainable emergency bailouts which are a clear warning sign about the financial pressures facing local government. Unless sustainable solutions are found to the severe financial challenges facing local government, we anticipate more councils may need Exceptional Financial Support (EFS) in the future.'

Jonathan Carr-West, Chief Executive at the Local Government Information Unit (LGIU), said, 'The Government's provisional local government finance settlement for 2026/27 unveiled [yesterday] has rightly been lauded for marking the first multi-year settlement in a decade, for taking the first steps to ensure that distribution more closely matches need, and for rationalising funding streams. These are reforms that will make a difference to many councils across the country.

'They also lay bare the scale of the challenge the sector faces today, because even with this change, and a significant uplift in spending power, there is still much further to go to stabilise council finances and protect essential services now and for the future. The aim of the fair funding review has always been the same - ensure that the distribution of money more closely matches need. This part of the reforms is reaching its end, and now we need greater focus on the most pressing issue facing local governments today - getting more money into the system.

'The Government's work towards reforming [SEND] pressures is welcome, alongside their evident emphasis on tackling homelessness and temporary accommodation costs, and promise of care service reform. These measures recognise that the current system is unsustainable and that councils cannot continue to absorb these costs alone. But they do not go far enough to address the systemic challenges that are faced today. Many of these reforms will not come into effect until as late as 2028. Meanwhile, councils will be pulling out all the stops to meet ever-surging citizen demand. The true test of whether the new system is working today will be whether the number of councils using exceptional financial support begins to shrink.'

To view all the documents relating to the latest provisional local government finance settlement for England, visit GOV.UK.

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