Cash-strapped councils to receive £500m boost from government, ITV News understands

Councils in England are expected to be given an emergency bailout as some struggle to fund essential services, Anushka Asthana explains

Cash-strapped councils are to be given a £500m boost by the government after the prime minister and chancellor agreed to increase next year’s local government finance settlement, sources have suggested to ITV news.

The money could be announced as early this afternoon - and comes after lobbying by levelling secretary Michael Gove and 40 MPs who wrote to express disappointment that more money hadn’t been given to local authorities.

The money will be welcomed - but will not plug the £1.6 billion shortfall for 2024/25 identified by the Local Government Association (LGA) - so serious cuts to services will still be likely.

I have learned that the chancellor and Michael Gove have now agreed on a boost to the local government finance settlement and we could get the figure as early as today.

The number I'm hearing is £500 million, which will be seen as a "modest" increase.

But still it is very unusual (I can't think of it happening before) for the government to increase the settlement from its initial figure - although there is always a consultation period.

As we've long been reporting at ITV News, councils are telling us they are on their knees

This comes after 40 MPs signed a letter led by Ben Bradley, MP for Mansfield but also leader of Nottinghamshire County Council.

He's been lobbying the PM, chancellor and Michael Gove as he's seen first-hand the pressure councils are under.

Mr Bradley told me that transport costs for kids to schools and also children's services were piling pressure on other services - leading to councils either cutting services or raising tax (not a good look in any year but certainly not an election year).

I've asked him about what £500 million would do if that figure is right - and he says government have been constructive on this - that this figure would not be "game changing in terms of long term sustainability… but certainly will help us to get through this difficult period".

Alongside ITV News colleagues, I’ve been all over the country and found councils on their knees.

The Conservative deputy leader at Kent County Council told me that local government is in a "death spiral".

One government source told me this won't be a magic bullet for councils - they will have to "prioritise".

The impact of election year is big on all sides. Labour does not want its councils raising tax, while the Tories are desperate for theirs not to issue section 114's and cut non-essential services.

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