Local government budget setting 2025/26

This research report presents the findings from an online survey of chief finance officers conducted by the LGA in January 2025.

Finance and business rates

Research

24 Mar 2025

Background

In January 2025, the Local Government Association (LGA) sent an online survey to chief finance officers (CFOs) of all English member authorities to understand the financial pressures faced in setting their budgets for 2025/26 and beyond, as well as the impact of funding on key policy areas including waste, housing, and children’s services. A total of 105 responses were received – a response rate of 33 per cent.

Key findings

Seventy-one per cent of respondents reported that it will be very or fairly difficult to set a balanced budget for 2025/26 compared to previous years. This was higher among single-tier and county councils, at 87 per cent.
Seventy-nine per cent of respondents felt very or fairly confident that they would have enough funding to fulfil all their statutory duties in 2025/26; this however drops to 44 per cent in 2026/27.
Considering the impact of the Autumn Budget and Provisional Local Government Finance Settlement, 13 per cent of respondents were more or much more likely to need to apply for Exceptional Financial Support in 2025/26, rising to 41 per cent for 2026/27.
All social care authority respondents thought it was very or fairly likely that external service providers would pass the impact of changes to employer National Insurance Contributions back to the council through increased service costs in both adults’ and children’s social care. This was also anticipated within public health, housing, and cultural and leisure services for more than three quarters of respondents providing these services.
A third of respondents reported that recent announcements on local government reorganisation have had a very or slightly negative impact on budget setting for 2025/26 – this rises to 52 per cent among district councils.

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Published by:: LGA Research
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