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.

Spending power and funding in England

The different types of local authority in England have very similar levels of spending power (the money available for them to make decisions). However, authorities vary considerably in the elements making up this spending power, because they vary in their ability to raise their own funds. One of these elements is settlement funding, made up of the un-ringfenced Revenue Support Grant and a share of business rates. Settlement funding has been a significant element of spending power in recent years. Metropolitan districts receive the most settlement funding per person of all types of authority, while shire counties and districts receive the least.

On average in England, core spending power has started to increase in recent years, although it is still lower in real terms than it was in 2015/16 for over half of local authorities. Settlement funding has decreased in real terms since 2015/16 across all types of local authority, although it has decreased more slowly since 2019/20.

Spending

The amounts spent per person by each local authority area show broadly similar variations to those in funding – London boroughs spend the most per person, and shire counties and districts the least. There is a large range of spending between different local authority areas, with the highest spending typically to be found in London. 

Local authorities mostly spend their resources on education services and adult and children’s social care – these three areas together made up over half of local government spending in every year from 2010/11 to 2022/23, much of it as part of ring-fenced grants.

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 some of the analysis in this briefing (specifically, funding and spending power totals by class of local authority, and by level of deprivation) 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 briefing Local Government Finance Settlement 2024/25 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 2024.