Local Government Finance Report (England) 2026-27

What happened: On 11 February 2026, MPs voted to approve the Local Government Finance Report (England) 2026-27, the annual settlement that sets out how much central government funding English councils will receive in the coming financial year. The motion passed by 277 votes to 143, with the government's position carrying comfortably.

Why it matters: This settlement determines the baseline funding available to English local authorities for 2026-27, shaping their ability to deliver services ranging from social care and waste collection to planning and housing support. Councils that consider the settlement inadequate face difficult choices between raising council tax, cutting services, or drawing down reserves. The vote confirms the government's proposed allocation will stand, meaning councils must now set their budgets for the year ahead on this basis.

The politics: The vote divided almost entirely along party lines. Labour and Labour and Co-operative MPs voted unanimously in favour, providing the government's majority. Conservatives, Liberal Democrats, and the three Reform UK MPs present all voted against, arguing the settlement falls short of what councils need. There were no notable rebels on either side. The vote took place on the same day as a related division on council tax referendum principles -- the thresholds above which councils must hold a public vote before raising council tax -- which also passed, reinforcing the government's overall approach to local government finance for the year.