SIGOMA Chair welcomes the Final Local Government Finance Settlement

Posted on February 26, 2026

Following the publication of the final Local Government Finance Settlement, our Chair, Cllr Sir Stephen Houghton, wrote in the Yorkshire Post welcoming the changes made since the Provisional Settlement:

'The Fair Funding Review represented a genuinely transformative step forward for local government finance. For the first time in years, the Government announced a plan to move toward a system prioritising deprivation-based funding and 100% Council Tax equalisation, ensuring that councils’ resources match the level of need in their communities.

However, last-minute technical changes were made following lobbying from London to include the cost of housing as a key measure of deprivation within the funding formulas. As I warned here previously, this meant that when the Provisional Settlement was announced in December, some high-need areas had seen their funding increase by less than they were expecting, with many areas in the south, and particularly London’s suburbs, doing much better that initially predicted. There was a risk that grant funding ... was moving down south to subsidise the low council tax bills in affluent areas.

Crucially, the Government has listened to the concerns that I have raised in multiple meetings over the last month. This week, Ministers introduced major improvements in the Final Local Government Finance Settlement, with targeted measures based on proposals from Sigoma that directly address the uneven impacts of the provisional announcement.

At the heart of this was a significant uplift to the Recovery Grant. This increase in funding will go to councils with high levels of deprivation and low council tax bases that were originally set to receive increases in funding around the national average or below. This is a significant win for our members: of the £440 million national uplift, £358 million (81%) will go to Sigoma authorities — councils representing many of the most deprived communities across England...

 These changes begin to close the longstanding gap between demand and resource in areas that have absorbed some of the heaviest service pressures in the country while also having faced the biggest cuts in funding during austerity.

The Settlement also tackles one of the most acute challenges faced by councils... Action to address historic and rising Special Educational Needs and Disabilities (SEND) pressures is a significant win for communities and the local government sector as a whole.   

This is a good deal ... but there is still more work to be done and there remain areas where further changes would strengthen the system in the longer-term. The Recovery Grant currently sits outside the core funding formulas, and while its continuation through 2028/29 is welcome, integrating targeted, need-led funding in future years is essential for securing the long-term stability that our most deprived communities desperately need.'

Cllr Sir Stephen Houghton, Chair of the Special Interest Group of Municipal Authorities (SIGOMA), leader of Barnsley Council

You can read the full article in the Yorkshire Post here.