Autumn Budget 2025: reaction from the sector

The Chancellor of the Exchequer, Rachel Reeves, announced a raft of measures affecting local government, including plans for Central Government to assume the full cost of SEND in 2028-29, new visitor levy powers for mayors in England, and a series of funding changes for combined authorities, including integrated settlements. 

A summary of the key measures can be read here.

Cllr Kevin Bentley, Senior Vice Chairman of the Local Government Association

"Scrutiny of today's Budget will focus on decisions around national taxation. However, while people rightly care about tax levels and the cost of living, they also care deeply about the local services they rely on every day.

"Councils work tirelessly to deliver on the ambitions of residents and are key to solving many of the challenges the Government is looking to address. However, local government finances remain under severe pressure with councils facing huge cost pressures in areas including adult social care, temporary accommodation, SEND, and home to school transport.

“The Government has acted on LGA calls to provide greater financial certainty and a simpler funding system, which are hugely important for councils. While funding levels have increased in recent years, councils will be rightly anxious that today’s Budget does not provide the increase in funding they desperately need to ensure their financial sustainability, protect services, support local communities, and address national priorities.

“We will be analysing today’s announcements in detail and publishing a full briefing in the coming days.”

Cllr Matthew Hicks, Chair of the County Councils Network

“Following last week’s announcements that even more council funding will likely be redistributed from county areas to urban cities through the Fair Funding Review, the OBR [Office for Budget Responsibility] has today highlighted this as a significant financial risk to those local authorities who lose out. The County Councils Network (CCN) urged the Chancellor to provide additional funding to ensure our member councils have the resources they need to prevent cuts to services.

“However, with the increase in the national living wage adding further pressure to their budgets and the government providing no new resources in today’s budget, our councils are facing even greater funding shortfalls over the next few years. The government must look again at its funding reform proposals and set out a substantial increase in core funding for councils in the Local Government Finance Settlement to ensure the fair funding review does not lead to more councils requiring exceptional financial support.”

“A government commitment to fully fund SEND spending by 2028 is, on face value, a positive step in limiting councils’ exposure to unsustainable expenditure. But there remains uncertainty on SEND deficits, which we estimate could rise to £18bn by 2028.

“With OBR red-flagging these existing deficits to the Chancellor as an issue that could lead to council bankruptcies, the government must move beyond promises of a solution and set out decisive action to wipe historic deficits at next month’s local government settlement, followed by fundamental reform that improves outcomes for young people.

“The Treasury also highlights local government reorganisation as a key means of generating future public sector savings. However, this can only be achieved by creating councils of sufficient size and scale. Analysis by PwC, commissioned by CCN, and previously cited by government, shows that creating local authorities covering over 500,000 people could save £1.8bn nationally whereas splitting up counties into smaller councils could end up costing taxpayers over £800m.”

Cllr Natalie Oliver, Economic Growth Spokesperson for the County Councils Network

“Confirmation that areas will be able to adopt a voluntary mayoral overnight stay levy, for those that wish to introduce it, is a step in giving places greater fiscal devolution to potentially enhance infrastructure and support local economic growth.

“Those places will now need to weigh up the impact on their local areas in deciding whether to introduce the levy, and the County Councils Network will be engaging in the consultation. But it is important to recognise that frontline council services will not benefit if the proceeds are retained solely by mayoral strategic authorities. Therefore, it should be made available to councils, and in all areas which wish to utilise it.”

Cllr Jeremy Newmark, finance spokesperson for the District Councils’ Network

“Local government’s troubled financial outlook remains fundamentally unchanged by today’s Budget. Many district councils will need to cut back the most visible and widely-used local services.

“The Budget document claims over £250m can be saved by 2030-31 by ‘cutting the cost of politics’. The figure appears to refer both to the reorganisation of local government and abolition of Police and Crime Commissioners, but no separate figure is given for either element. The document says reorganisation has the ‘potential to reduce the number of councillors in local authorities by around 5,000’.

“The Government committed to reorganising local government without undertaking any evaluation of the potential for savings. It should now publish in full all the information it holds, including on the inevitable transitional costs of the reforms.

“There has been no previous indication of a target for reducing the number of councillors. If there is now a target, the figure should be widely debated, with any projected savings set against the negative impact to local communities of the loss of democratic representation.

“We welcome and campaigned for local leaders being able to choose to levy tourist taxes. This must be done in a way which reflects the highly localised costs which tourism brings.

“The costs of tourism are often borne in individual towns or along small stretches of coastline, rather than extending across a wider region. It’s therefore essential the leaders of principal authorities including district councils play a key role in determining how the proceeds of the tourist levy are spent.

“It’s perplexing that a Treasury committed to devolution is seeking to retain the mansion tax proceeds centrally, rather than ensuring that the money raised locally is spent locally, at a time council services are crying out for cash.

“Council tax will still be based on 1991 home valuations which don’t always reflect householders’ real ability to pay. Many district areas have few if any homes which fall into the new higher bands. A more fundamental reform of council tax is required to ensure fairness to bill payers and service users everywhere.

“Planning has becoming increasingly underfunded as councils have been disproportionately hit with austerity over the past 15 years. We therefore welcome the much-needed additional funding for extra planners, even if the return on the investment won’t be apparent for several years.

“However, the scale of the planning reforms announced by the Government is adding to planners’ workload and risks diminishing their ability to ensure developments meet local needs. This extra funding should be seen in that context."

Cllr Claire Holland, Chair of London Councils

"Greater fiscal devolution and local empowerment is critical to addressing the crisis in council finances and stalled growth. We welcome confirmation that London will be able to introduce an overnight accommodation levy. This is something we have long called for and we look forward to working with the government and the Mayor on the design and implementation of the levy, in order to ensure this is a success for Londoners and our tourist industry. 

“It is vital that a fair portion of the revenue raised from any levy is retained locally by boroughs, so those parts of the capital experiencing high volumes of tourism have the resources they need to invest back into their area in order to manage pressure on services and support growth, with the remaining funds invested across the capital to support pan-London services and local growth opportunities.

“We have repeatedly called for reform of the council tax system, but this must be done in a way that gives local authorities more freedoms and flexibilities rather than fewer, and maintains the principle that revenues raised locally are retained locally. We will be looking at the government’s proposal for a council tax surcharge on higher value properties in more detail and will continue to make the case for an approach that is fair and empowers local authorities.”

Heather Sandy, Chair of the ADCS Inclusive Education Network

“ADCS [Association of Directors of Children's Services] welcomes the Autumn Budget announcement that, from the end of the statutory override extension in 2028, SEND costs will be absorbed by the Department for Education. This is a constructive recognition of the significant financial pressures faced by local authorities.

“However, the detail will be crucial, and we look forward to greater clarity on the scope of costs to be covered and how these arrangements will work in practice.

“For ADCS, it remains essential that, alongside tackling current funding challenges and historic deficits, the Government retains a clear and sustained focus on creating a SEND system that is genuinely sustainable for the future — one that consistently meets the needs of all children and young people and enables them to thrive.”

Florence Eshalomi, Chair of the Housing, Communities and Local Government Committee

“The Budget announcement today of a council tax surcharge on homes worth over £2m points to a welcome willingness of the Government to look again at council tax. However, council tax remains the most unfair and regressive tax in use in England today, so the Government should now take the time to examine wholesale council tax reform rather than limited tinkering. As an interim step to an overhaul of this system, the Government should examine giving local authorities more control over the council tax in their areas.

“As a Committee, we will be interested in how the council tax surcharge will be implemented. It’s a positive step that this measure targets owners, rather than occupiers. However, there are questions about how the system will be administered, not least in how it approaches valuing how much properties are worth.

“Removing the two-child limit is very welcome and will be crucial in battling inequality across the country. This move will help bring hundreds of thousands of children out of poverty, lift the threat of homelessness, and prevent even more families being dragged into this cycle.”

Owen Mapley, CIPFA Chief Executive 

“While the Chancellor increased taxes significantly, there was little comfort in this Budget for those running overstretched public services.

“Long-term pressures on public services remain. Social care funding gaps, historic Special Educational Needs and Disabilities (SEND) deficits and rising demand continue to place heavy burdens on councils. The Budget announced a major change by shifting responsibility for funding SEND expenditure to central government from 2028/29, but huge questions remain about how historic deficits will be resolved and what councils should do in the meantime as demand continues to soar. There was something the OBR didn’t quite get right today, but their assessment of the SEND crisis facing local authorities accurately captures the gravity of the situation.

“The budget introduces a High Value Council Tax Surcharge, a new charge on residential properties worth £2m or more from 2028-2029. While the small print indicates that this is intended to go towards supporting council expenditure, the mechanism risks creating confusion for taxpayers over whether they are funding local services and decisions made by local councillors or contributing to a national pot. This risks eroding the vital link between local taxation and local democratic accountability."

Jonathan Carr-West, Chief Executive, Local Government Information Unit

“There was little in this Budget to address the real risks facing local government: SEND, temporary accommodation, adult social care. But it did reveal something about the government's underlying attitude toward councils.

“Pots of money handed out to individual areas will, of course, be welcome — and we know that councils will use every pound to great effect. But these one-off allocations are no substitute for a fair, sustainable funding system that genuinely empowers local government.

“It’s right that local areas should be able to decide whether a tourist tax is right for them. But why should this be limited to mayors? Why not trust local leaders and councils? Why not bring it nearer to communities?

“Most telling of all is the introduction of an additional levy on council tax — money that won’t support cash-strapped councils but will instead go straight back to Whitehall not the town hall. 

“There has always been a tension between councils as sovereign, democratically elected bodies and as delivery agents for central government policy. 

“This Budget treats councils as tax collectors for Whitehall: taking all of the political heat but getting none of the benefit.

“This government came to power promising devolution, localism and community empowerment. Based on this budget, that's still work in progress.”

Jonathan Werran, Localis Chief Executive

“Many in local government will be hailing central government’s commitment to fully fund SEND provision from 2028/29.  As a measure this will further reduce the risk of more councils issuing section 114 notices, help strengthen local financial resilience and say a final good riddance in 2027/28 to the accountancy sleight of hand that is ‘statutory override’.

“However, the story does not end here and there will be the legacy of historic deficits and debt management, totalling perhaps £14bn across the sector to manage as a fiscal risk for councils when setting balanced budgets, let alone the question of how central government departments will absorb the costs in day-to-day spending.”