Funding, Finance, and Reform: a spotlight on the LGA Finance Conference 2025

A Three-Year Funding Settlement

The announcement of a three-year funding settlement for local authorities marked a significant shift. After years of dealing with annual settlements, this change allows councils to plan their spending over the next three years.

While three years might seem short, especially for large construction projects, it’s a marked improvement.

Jim McMahon, the Minister of State for Local Government and English Devolution, addressed questions about introducing rolling three-year settlements but remained non-committal. From a supplier and taxpayer perspective, such a policy seems like an obvious way to support long-term decision-making and stability across the sector.

Exploring Funding Opportunities

One standout opportunity highlighted during the conference was the National Wealth Fund. With £3.4 billion of funding available for public sector capital projects, the scheme offers a significant source of affordable finance, with interest rates at just 40 basis points above current gilts.

The scheme is actively promoting its services, and we strongly recommend that consultants and clients explore this funding option further. With its ability to support large-scale projects cost-effectively, the National Wealth Fund could be a great opportunity for local authorities looking to deliver impactful improvements while navigating tight budgets.

Balancing Statutory Spend and Rising Demands

Unsurprisingly, cost pressures were a recurring theme throughout the conference. Over 80 percent of local authority spending is dedicated to statutory requirements, including adult and child social care and temporary accommodation. These critical services leave councils with limited flexibility to address other priorities.

One particularly pressing issue discussed was the rising cost of Special Educational Needs (SEN) school provision. With growing strain on budgets, the suggestion was made to integrate more SEN students into mainstream schools.

Local Government Reorganisation

The potential reorganisation of local government sparked significant debate. Proposals to replace the two-tier system—County Councils with District/Parish Councils underneath—with a single unitary model were central to the discussions. The plans also addressed concerns about the size of unitary councils, suggesting that overly large councils might need to be scaled down to improve service delivery.

A key point was the idea that district authorities facing potential abolition might fast-track investment decisions while they still have control. This could include projects like leisure centre upgrades or capital works that would benefit their local communities in the short term. While speculative, this highlights the complexities and strategic considerations at play during a time of significant change.

Moving Forward

With cost pressures, organisational reform, and funding opportunities shaping the future, councils will need to navigate carefully to deliver effective public services. At Pick Everard, we remain committed to supporting local authorities through these challenges, helping you achieve your goals with efficient, and sustainable solutions.

For more information on the National Wealth Fund and how it could help deliver your next public sector project more affordably and effectively, get in touch with us today.