Tag Archives: Local Authorities

Local Elections 2025

The main takeaway from May 2025’s local elections is that Reform UK is now firmly placed among the top players in Westminster. Despite only recently professionalising and mobilising, the party has turned a sea of established Conservative councils a bright turquoise blue. The Conservatives are now rapidly losing electoral support and Reform UK’s Leader Nigel Farage has declared his party the main opposition to the government.

Reform UK’s sharp rise has been evident since last year’s general election. Translating its position in the opinion polls into electoral success has, however, previously been inhibited by the UK’s first-past-the-post voting system. This saw the party win only five seats in last year’s general election despite receiving 14% of the national vote share. Reform UK has since showed no signs of slowing down, with opinion polls increasingly in their favour in the lead up to this month’s local elections. The party was undoubtedly the big winner of the contest, securing 677 council seats, demonstrating its credentials as a serious challenger to the two main parties.

The Conservatives have had the toughest result of all the parties, losing 674 seats overall. Of the 23 councils up for election, they had been in control of 16. Reform UK now control ten, the Liberal Democrats have the keys to three, and a further ten have no overall party control. This is likely to raise questions over Kemi Badenoch’s future as leader of the Conservative Party, although a formal challenge is unlikely to materialise given Conservative MPs’ appetite for stability after a recent series of damaging leadership changes. Conservative headquarters will now have to ensure its strategy is bulletproof if it hopes to fend off the threat of Reform UK and meaningfully challenge the incumbent Labour government at the next general election.

It was not a successful result for the government either, with Labour losing 187 seats. The Party’s only glimmer of hope can come from returning incumbent mayors in Doncaster, North Tyneside and West of England. While Labour had a smaller pool of seats to defend than the Conservatives, meaning its losses were less severe, keeping this trio of local authorities will be hard to celebrate considering Reform UK came a close second in all of them. With a brand new Reform UK MP overturning Labour’s majority of 14,696 in Runcorn and Helsby by a mere six votes, there is clearly serious dissatisfaction with the government’s direction of travel, undoubtedly causing a serious headache for No.10.

Two truths emerged from the first real test of the government: Labour must pull through on delivery for the public if it hopes to keep its position in power come the next general election, and the Conservatives need to figure out how to remain as the main opposition party with Reform UK continuing to gather momentum at pace.

Join us on Thursday 8 May at 9am for our Post Local Elections Webinar with former Treasury Minister Rt Hon David Laws and JL Partners Director Guy Miscampbell to discuss the local election results and what they mean for national politics.

You can sign up using this link.

Does the latest financial settlement for local authorities shift the dial on council finances?

The government has now confirmed the local authority financial settlement for 2025-26. This is a crucial time of year for councils who rely on these funds to deliver statutory services including adult and children’s social care, and support for children and young people with special educational needs and disabilities. Independent providers of these services should pay close attention to the financial settlement as it provides a good indication of future cost pressures for councils at a time when demand for statutory services continues to rise.

The final settlement will provide £69.4 billion of core spending power to local authorities in England. This represents a rise of £4.4 billion compared to 2024-25, constituting a 6.8% cash terms increase (or 4.3% when adjusted for inflation). Of this £69 billion figure, 24% is non-ring-fenced settlement funding, 14% is grants for social care, 6% is other grants, and the remaining 55% is council tax. While the overall increase in spending power is broadly aligned with increases in recent years, in real terms it is approximately 9% below where it was in 2010-11. Since this date, councils have become increasingly reliant on council tax revenue to meet their statutory obligations.

The funding settlement does not appear to provide much relief to local authorities who continue to struggle under the pressure of growing demand for services. Chair of the Local Government Association, Cllr Louise Gittins, said the extra funds ‘will help meet some of the cost and demand pressures they face but still falls short of what is desperately needed’. She went on to say that that the funding landscape remains extremely challenging for councils of all types and many could be forced to make further cuts to non-statutory services.

However, the government hopes change is on the horizon with its proposed reforms to local authority funding. Ministers believe these reforms will provide more financial certainty to councils, which will in turn allow them to better manage their spending and reduce cost pressures. The Ministry of Housing, Communities and Local Government has recently concluded a consultation on local authority funding reform and is in the process of analysing the responses it received. One of the primary proposals under consideration is to move to a multi-year settlement from 2026-27, which the government believes ‘will enable [councils] to better plan ahead and achieve better outcomes for local residents, as well as better value for money for taxpayers.’

Overall, the recent confirmation of the local authority funding settlement points to more of the same for councils up and down the country – mounting cost pressures will leave council leaders scrambling to meet rising demand for services. For providers of local authority funded services, this demonstrates the ongoing importance of communicating to commissioners their high-quality, value for money offering which will reduce the burden on council resources. It will also be vital for businesses to monitor the government’s response to the consultation on local authority funding as this will allow them to best anticipate and respond to possible future changes to commissioning practices following the policy’s implementation.

To discuss the local authority funding landscape in more detail, please contact Hugo Tuckett (hugo@gkstrategy.com).

Reflections on the Future of Council Tax

GK Associate Hugo Tuckett assesses the likelihood of council tax reform amid rising concern about local authority financial resilience.

Is council tax reform on the horizon?

Amid rising bankruptcies in recent years, and growing concern about the sustainability of council finances, funding mechanisms for local authorities – and particularly council tax – are attracting growing political scrutiny.

In December 2023, the Local Government Association reported that almost one in five council leaders and chief executives it surveyed think it is very or fairly likely that they will need to issue a Section 114 notice this year or next due to a lack of funding. A Section 114 notice is issued by a council’s finance officer if they believe the council’s expenditure will exceed the resources it has available. Eleven Section 114 notices have been issued since 2018, with only five issued in the 30 years prior.

Given that council tax receipts now make up over half of local authority spending power (56.9% in 2023-24 compared to 49.1% in 2015-16), ensuring the council tax regime is operating effectively is critical to the long-term sustainability of local authority finances.

The Levelling Up Committee recently made a series of recommendations to the Government on council tax reform. In its report, the Committee reiterated its previous conclusions about the “unfairness and outdatedness of the council tax regime”.

The Government has since said it has no plans to conduct a revaluation of council tax bands (the Committee’s key recommendation) as, amongst other factors, “it would particularly risk those on a lower income, including pensioners, who have seen their homes appreciate in value”.

Here is the focal point of political discourse. A Conservative Government, aware that (according to recent YouGov polling) the Party is now the most popular only among the over-70s, will be aggrieved to conduct a revaluation of property bands which would hit the pockets of its core voter base. A Labour government on the other hand, with traditionally greater allegiances to younger, non-home owning voters and those on lower incomes could take a fresh look at this issue. One option likely to be under consideration is the introduction of new, higher bands of council tax.

Given the Shadow Chancellor, Rachel Reeves, has ruled out numerous tax rises ahead of the upcoming General Election, council tax reform represents one revenue-raising lever still available to her. While the details of any potential reform are still unknown, it is a near certainty that the council tax regime will only grow in political salience in the years ahead.