Deputy Prime Minister Angela Rayner announced a transformative £5 billion funding boost for local services at the Local Government Association Conference 2025 in Liverpool, aiming to empower councils and improve essential services like social care and road maintenance.
This initiative promises significant benefits for communities across the UK.
Empowering Local Governments
The announcement by Deputy Prime Minister Angela Rayner marks a pivotal shift in how local governments are funded and empowered in England.
The £5 billion funding increase is set to enhance adult social care, children’s social care, and local road maintenance.
By reducing micromanagement from central government, councils can now plan and deliver services more effectively, ensuring better outcomes for their communities.
Benefits of the Funding Boost
- £4 billion uplift for adult social care
- £1.6 billion investment for road maintenance
- New Local Government Outcomes Framework focusing on literacy, health, and safety
- Fair Funding Review to allocate grants based on local needs
- Encouragement of insourcing services to support local businesses
A New Era for Social Housing
The government’s commitment to addressing housing shortages is evident through its £39 billion Social and Affordable Homes Programme.
Targeting the construction of 300,000 new homes with at least 60% designated for social rent, this initiative aims to provide stable housing solutions for families currently in temporary accommodations.
This ambitious target could significantly alleviate housing pressures across the UK.
Housing Programme Highlights
- Aim to build 300,000 new homes over the next decade
- Focus on providing affordable housing options with 60% allocated for social rent
- Potential game-changer if executed effectively according to housing sector experts
- Supports council-led housebuilding initiatives through increased funding and resources
- Paves the way for improved community infrastructure and living conditions
Tackling Bureaucracy with Technology Integration
An unexpected yet innovative aspect of these reforms is the integration of AI technology into local government operations.
By harnessing AI capabilities, councils can reduce administrative burdens and enhance service delivery efficiency. This approach positions UK local governments as pioneers in digital transformation within public sector operations.
Full Speech by The Rt Hon Angela Rayner MP
Exactly as Delivered in Liverpool, England.
“Can I just start by saying how proud I am to be back here in Liverpool.
And I’m sure you’ve all heard the devasting news this morning about the tragic loss of legend Diogo Jota.
I know everyone here, his fans and the city of Liverpool will be heartbroken by this news.
My thoughts are with his family at this saddened time.
It’s a pleasure to look out at a room full of people dedicated to serving the communities that you represent.
From Barnsley to Barrow – Cornwall to Cheshire…
Councillors and mayors are delivering day-in, day-out for local people right across our country.
I know how hard you work
I know the difference you make
I’m for local government because I’m from local government.
And yes, I wasn’t a councillor. But as a home help and a carer I was on the front line delivering local services.
And as a union rep, I worked with the leadership of a council to transform the service I worked in, for the good of the people that we served.
And as a young mum, facing low pay and insecure hours without much of a safety net, it was the Sure Start centre and the council home that helped me turn my life around.
The services that you deliver every single day changes lives
And I say that not just as the Deputy Prime Minister, but as someone whose own life was changed by local government
It’s why, in me, you will always have a Secretary of State that sees you as a partner, and not a punchbag.
And Conference, it may not surprise you to know – but I’m not a patient person.
I’ve been restless for 14 years.
I’m restless to give local people a stronger voice.
I’m restless to put decision-making in the hands of the people who know best.
I’m restless to restore local government and provide the change that we were elected to deliver.
Because I know how hard it has been
How it feels at the sharp-end at local government level
That’s why every single day in Westminster I’m fighting to turn that around
To put power back in your hands, and deliver for communities the length and breadth of Britain.
So – almost 12 months ago from the General Election, what have we delivered?
Just last month, in the Spending Review we announced five billion pounds of new funding for local services.
New funding means an 8% increase in Government funded spending power in the next four years compared to a reduction of 24% in the first four years of the last government.
We’ve delivered a £4 billion uplift to adult social care
alongside a targeted recovery grant of £600m for the areas most in need
we doubled the direct investment in preventative children’s social care services.
and provided a record £1.6bn for local road maintenance, enough to fill an extra 7 million potholes over the next year. I knew that would wet your whistle.
And an uplift for every single local highway authority.
We have refused to repeat the mistakes of the past which took the axe to your budgets, and left our communities to pay the price
You made the case for local government, and we listened.
That’s why we’re rolling back the era of micromanagement too, with simpler funding, and a rapid consolidation of your Finance Settlement.
We are handing you the freedom and flex to meet local needs without needing to get sign off from central government for the most minor change.
And right now, the paperwork you’re asked to fill out for micro-managed funds every year would stretch from here to the West side of Wirral!
There’s no justification for that – so we’re cutting it down
Meaning that you can focus on your priorities, not filling out forms.
And with more flexible funding, we’re giving you the opportunity to work more collaboratively including through new pilots so councils and mayors can pool budgets and do joined-up services, learning the lessons of projects like Total Place – the last Labour government’s pioneering reform programme.
Because we know every ambition of this government requires an active, empowered and strong local government.
And we were elected to bring change, and that change can only be achieved in partnership with you.
Nowhere is that more obvious than housing.
None of our ambitions are possible without the support and the expertise of people here today.
And the extraordinary examples of so many leaders in this room have inspired us to go further and faster.
Right here in Liverpool, under the leadership of Council leader Liam Robinson and the Mayor Steve Rotheram, this great city is going from strength to strength.
You only have to look at the incredible regeneration of the Liverpool Waters district – not too far from here, with new funding unlocking around 2,350 new homes.
Now Liam said the Central Docks could act as a “beacon for what housing developments in the 21st century can and should be”.
It’s hard to argue with that.
But you know – and I know – you need a government that matches your ambition.
And that’s why I am so proud to say that just last month we announced the biggest increase in the social and affordable homes budget for a generation!
Our historic £39 billion of new Social and Affordable Homes Programme aims to deliver around 300,000 new homes with at least 60% for social rent.
This is a personal priority not just for me, but for the whole of this Government.
And I say that, in the context of 160,000 children that are growing up in temporary accommodation
When a million are living their lives on social housing waiting lists, no government should sit back whilst people live their lives in limbo.
So through investment and reform, this government is backing councils and the whole social housing sector to deliver council housing.
That means a brighter future where families aren’t trapped in temporary accommodation and young people are no longer locked out of a secure home.
And we’re giving the sector certainty in other areas too.
A ten-year rent settlement, consulting on how to implement rent convergence,
Giving social landlords equal access to the building safety funds – for the first time ever
And in the Autumn, we’ll confirm our approach to help councils to borrow from the Public Works Loan Board.
And on top of this, we’re also committed to reforming the support given for skills capacity with a new Council Housebuilding Skills & Capacity Programme
And that will be a partnership between the LGA and Homes England – backed by £12 million in funding – and it will also help you get the skilled staff you need to build.
And the scale of this challenge means we all need to play our part.
Local authorities, housing associations, investors, developers, housebuilders, and regulators are all vital to help us reset social housing – so that it’s treated, once again, as the national asset that it is.
Now, taken together with our bold planning reforms, the new National Housing Bank and the billions we’re putting into transport and infrastructure
there’s a real opportunity here for councils.
Opportunity not just to build the decent, and secure homes that working people so desperately need, but to build stronger communities at scale and at pace.
Our goal of delivering 1.5 million homes will only be met by building affordable homes, with councils in the driving seat.
We want our new Programme to be a game-changer.
We’re setting a target which is six times more than were built in the last decade.
The truth is for too long, the potential of what local government can achieve has been underestimated by Whitehall.
Our government was elected to deliver change, and I know how fundamental you all are to delivering that.
But you’re all having to work within a broken system.
You’ve been left unequipped to deliver what is being expected of you.
And despite the huge sums that you’re spending on public services
On adult Social Care
Children’s Social Care
SEND
and temporary accommodation
I’m hearing loud and clear from you all, that these services are still not working for the people who need them.
And the truth is that Westminster just hasn’t kept its side of the bargain.
Public services need reform, and the onus is on us to work with you to deliver it.
And that is why I am here today to fire the starting gun on a new way of working with you to deliver the reforms we know are needed.
First, we are today announcing a fundamental shift, to radically simplify the funding and reporting regime that underpins your work.
Through a new Local Government Outcomes Framework, we will move together to a completely new way of measuring performance.
And this will be focused on delivering what we know matters most.
Outcomes like kids learning to read and write
people living healthier lives for longer
and communities feeling safe.
It brings everything in line with the government’s broader Missions and the Plan for Change
And means prioritising the long term, instead of getting caught up in the nuts and bolts.
The aim is that it frees you up to deliver meaningful outcomes
And facilitates a shift towards prevention.
But I know that we don’t have all the answers
So my promise to you, is that if you come with a new way of delivering a service and it shows results, we will work with you to pursue it.
The micromanagement of previous governments failed
It wasted taxpayers’ money, and got us into the mess we’re in now.
We can all recognise there are times when governments have to step in
And make no mistake, that I’m still prepared to intervene where there is failure to deliver
But it has to be by the book – and we can’t have a ‘Westminster knows best’ attitude.
That is why we’re putting together a clear menu of actions of how government will respond where services are failing.
I want everyone to know where they stand so concerns and weaknesses can be picked up before they become a crisis.
And I’m committed to writing this with the sector, to get this right the first time.
There’s real urgency to this – so to the Chief Executives and the Council Leaders here today
Keep an eye on your inbox, because straight after this speech today, you’ll be receiving details of how to get involved.
Now everyone in the room knows that ending Whitehall micro-management also means sorting out the spaghetti soup of obligations facing local government.
That’s why, alongside our new Outcomes Framework, we’ll be launching a comprehensive review to ensure unnecessary regulations and needless asks from government aren’t getting in the way of you serving your communities.
We will harness the Government’s AI team to unlock efficiencies.
And work lock step with the LGA so we get it right.
So, that’s two fundamental shifts in the way this government is doing business with local leaders.
And we won’t stop there.
Money is understandably at the forefront of everyone’s minds in this room.
You watched as your communities were unfairly short-changed for too long.
So that’s why – my third pledge – is to make good on a promise I made countless times in Opposition.
A promise to fund councils on the basis of need.
The last government promised a Fair Funding Review back in 2016, they recognised how outdated and unfair the funding process was back then.
[Political content removed]
But not under my watch.
Anyone who knows me, knows I don’t make promises that I can’t keep!
I listened to the people in this room calling for government funding to recognise the unique challenges of their place
whether that be rising temporary accommodation or even the pressure caused by huge footfall in coastal communities on the weekends.
Many of you – including our colleague, the Minister for Local Government – campaigned for this change for decades.
And this government will waste no time in delivering it.
We will implement a Fair Funding Review.
And yes, that’s the full-fat version!
Jim and I will make no apology for this.
Government grant will be allocated based on the drivers of need in your area in a fair and transparent way.
We will replace the decade old data, and for the first time, properly take into account factors such as deprivation and poverty
the cost of remoteness faced by rural communities – meaning bus drivers and refuse collectors have to travel miles to serve their communities.
We will take into account the varying ability to raise tax locally with lower house prices impacting on councils budgets
temporary accommodation and the impact of daytime visitors on major cities and coastal towns alike.
Taken together, this new approach supports every part of the country to manage their unique pressures.
And I’m impatient – as I know you are – for this change.
So alongside Minister McMahon, we will waste no time in putting things right to support places that lost out to rebuild those valued services and match money to need.
And true reform of local government means taking a long and serious look at the plumbing.
We won’t shy away from that.
That’s why my fourth on my list of Local Government is Local Government Reorganisation.
Now I can feel the anxiety levels in the room increasing at that phrase!!
But I think everyone in this room can agree that governments cannot keep passing the buck on this one.
If we are serious about shifting local government into a stronger footing…
And fit for the future
Delivering good services for residents
Then we must cut out this needless duplication.
We must take the brilliant leadership shown by district and county councillors, and move it to a simpler structure
with more resources for the frontline, and a clearer accountability for residents.
So many of you in this room have entered this process with an open mind and I want to thank you for your continued support as we navigate towards the end of a two-tier system in England.
You have my word, that Jim and I will work in partnership with you every step of the way.
Reforming local government also means learning from our mistakes as well as our successes.
And my fifth focus is on trusting local government to deliver services in-house.
Local government has long been the champion of insourcing – and I know too well about your efforts to innovate, and bring services in-house to lower costs and improve outcomes.
We hear you and are on your side.
That’s why we’re also delivering new procurement flexibilities for councils so you can confidently support your local businesses, and ensure that the investment and jobs stay local too.
We are working to undo the ideological presumption of outsourcing by default, as part of our plan to Make Work Pay.
The truth is that we’ve become hooked on short-term solutions – creating a costly dependence on external providers which can fail to deliver particularly for vulnerable people, young and old.
You’ve been telling us about your efforts to innovate, and bring services in-house to lower costs and improve outcomes.
With colleagues across government, we’ll introduce a quick and proportionate public interest test, to decide whether work could be done more effectively in house.
The consultation on insourcing launched last week and I have no doubt we will get a lot of responses from people here today!
I know what’s possible when local leaders have the powers to really deliver.
With local people seeing that change in their high streets, in the opportunities available to young people, and in their hopes for the future.
That’s why we’re shifting power out of Whitehall to our regions, and making devolution the default setting through our landmark English Devolution and Community Empowerment Bill.
It’s part of building a modern state, built on the foundations of a strong local government.
So, that all levels and in everything we’re doing – whether through devolution, fairer funding, trusting local government in-house, or giving authorities the certainty and freedom to deliver on what really matter.
We’re handing power back to where it belongs – to people with skin in the game.
Resetting, rebuilding, and renewing local government, through ambitious investment and reform, and, with it, our country, after the hardest of years, so that it, once again, works for working people.
That’s the difference a government makes.
That’s the difference you make in your Local communities every single day.
I’ve got your back. Let’s work together.
Thank you.”
Additional Reading
Bottom Line
The recent announcements by Deputy Prime Minister Angela Rayner signify a promising future for local governance in England.
With substantial investments in essential services and housing initiatives, these reforms aim to empower communities while fostering economic growth through strategic partnerships between central government and local authorities.
Sources: UK Government, Local Government Association, Spending Review 2025 Documents, Ministry of Housing, Communities and Local Government and The Rt Hon Angela Rayner MP.
Prepared by Ivan Alexander Golden, Founder of THX News™, an independent news organization delivering timely insights from global official sources. Combines AI-analyzed research with human-edited accuracy and context.
