Local Government Finance Settlement 2016/17

The LGA has been working closely with Government on behalf of all councils to highlight the financial challenges they are facing over the Spending Review period.


Key messages

The LGA has been working closely with Government on behalf of all councils to highlight the financial challenges they are facing over the Spending Review period. This has led to the welcome announcement of £416 million of new money for councils.

This extra funding will go some way towards easing the financial pressure on those local authorities who were adversely affected by the new method of allocating reductions in Revenue Support Grant (RSG). It will also ensure that no council will be subject to an adjustment to their business rates tariff or top up to reflect negative RSG within the next three years. But most councils will continue to have serious funding gaps despite this improved Settlement.

The final Local Government Finance Settlement 2016/17 confirmed that core government funding to councils known as Revenue Support Grant (RSG) would reduce by 28 per cent (£2.7 billion) in 2016/17. There has been no change to the method of distributing central funding (locally retained business rates and RSG) compared to the provisional Settlement.