Council leader says it's 'difficult to be positive' after spending review

While the review included boosts for children’s services, housing, and transport, concerns remain about whether the funding goes far enough to address the deepening financial challenges councils face.

Adult Social Care

Chancellor Rachel Reeves announced a £4bn uplift for adult social care by 2028, delivered through a combination of core local authority grants and the Better Care Fund.

The adult social care sector broadly welcomed the announcement but warned it offers only short-term relief. Sector leaders say systemic reform is urgently needed to address the long-term pressures.

Portsmouth City Council is facing its own mounting costs in adult social care, with an estimated £9.4m in additional spending required for 2025/26.

“Overall, the additional funding for local government over the next Spending Review period is lower than it has been over the past five years,” said councillor Steve Pitt, leader of the council.

“While the Chancellor announced an uplift in grant funding for social care, it appears to be just around half the average increase of previous years, so if demand continues at the same pace it’s going to lead to a significant shortfall and place extra pressure on our services.”

The Local Government Association (LGA) said it welcomed the £4bn increase “on the face of it,” but warned it is “unlikely” to cover the full range of financial pressures councils face, including inflation, demographic changes, rising National Living Wage, and increased national insurance contributions.

Temporary Accommodation

An additional £950m was also announced for the Local Authority Housing Fund, aimed at increasing the supply of temporary housing for people who are homeless or at risk of becoming homeless.

However, Cllr Pitt said the new funding “implies there will be no additional funding to tackle the Council’s existing £6m shortfall on temporary accommodation.”

The LGA described the boost as the largest of its kind and said it would help councils struggling with “unsustainable” pressures in temporary housing.

Looking Ahead

Despite the headline figures, Cllr Pitt expressed skepticism about the overall impact of the spending review.

“It’s difficult to be positive at this point as we expect to have to wait until shortly before Christmas for the details,” he said. “But on the face of it, this goes nowhere near far enough to address the £8bn forecast by the cross-party Local Government Association to be needed by local authorities by 2028-29 just to maintain Council services across the country.”

According to the LGA’s analysis, councils could face an £8bn funding gap by 2028/29. If current cost and demand trends continue, local authorities could see service costs rise by nearly 30 per cent.