Local government finances

Local government in England is handled by several different types of local authority – in some areas it is split into two tiers (of district and county councils), while in others a single authority handles all local government responsibilities. The needs and relative deprivation of these areas vary widely, and so does the amount of money available to each.

Funding for local authorities in England

Most funding for local authority services is allocated in annual Local government Finance Settlements. These settlements determine the level of “core spending power” that each authority will have; the total is made up of grant funding from central government, retained business rates, and revenue from council tax. Other ring-fenced consolidated grants for specific purposes are also included in the settlement, although only some of these are included in core spending power.

Levels of core spending power have changed over time. Authorities with social care responsibilities have generally had real-terms increases in their core spending power since 2019/20, but for other authorities the trend has been much flatter. Council tax revenue and grants for social care now make up a larger proportion of core spending power than in previous years.

Other funding is also provided outside annual finance settlements, such as the Dedicated Schools Grant, other grants for housing, education, and skills, and funding for investment purposes.

Local authority spending

Education services make up the largest proportion of local authority day-to-day spending in England, followed by adult and children’s social care. Spending on housing and on highways and transport make up the largest proportion of investment spending.

Local authority day-to-day spending in England has generally decreased over the past decade. This is partly driven by lower spending on education as more schools become academies and receive their funding from central government. Spending on adult and children’s social care has increased.

Similar statistics are also available for the devolved administrations of the UK, and this briefing includes information on where this data can be found.

Data downloads

The data underlying much of the analysis in this briefing can be found in the Excel file linked above under "Supporting documents". You can sort and filter the data in the file using the buttons in the column headings. Other relevant data can also be found in the downloadable file accompanying our research briefings Local Government Finance Settlement 2025/26 and Local Government Finance Settlement 2026/27 to 2028/29, and our data dashboard Local authority data: finances.

Real-terms figures in this data are calculated using forecasts for the GDP deflator, published by the Office for Budget Responsibility in March 2026.