The Chancellor’s Autumn Budget set out a series of measures that will shape the year ahead, and while little detail has been provided, Rachel Reeves has promised that savings will be invested into public services. 

With many measures not planned to take effect until 2027-28 or even 2028-29, the impact may not be immediately felt.  However, the Office for Budget Responsibility (OBR) has calculated that total public sector receipts are forecast to rise as a share of the economy from 38.9% of GDP in 2024-25 last year, to 42.4% of GDP in 2030-31. That’s an increase from £1.1 trillion to £1.5 trillion – which (if correct) provides hope for the future of our public services. 

Below, we have set out the key headlines from the Budget announcement and what that could mean for local authorities across the UK. 

Scrapping of the two-child benefit cap 

The two-child benefit cap has been a key driver of child poverty, which reached a record high of 4.45 million children in the year to March 2024. This reform is expected to reduce the number of children in poverty by 450,000 by 2029-30 and is definitely welcomed by the sector, but “this reform alone isn’t going to solve the problem”, says Laura Power-Wharton, Social Care Consultant at 31ten. “It needs to be coupled with additional support for families through a cross-sector strategy that addresses key drivers of child poverty and reduces health inequalities.” 

Special Educational Needs and Disabilities (SEND) funding 

The government will manage future funding implications for SEND within the overall departmental expenditure limits (the multi-year budgets set by the government that cap how much each department can spend on planned, controllable activities), aiming to ensure that local authorities are not expected to solely bear future costs. 

The “Statutory Override” – the budgeting mechanism that allowed councils to manage large high-needs deficits will now end in 2028. As a result, this means a sustainable financial plan needs to be in place by then to prevent a major shortfall. 

“These changes, while fundamental to move the financial burden away from local authorities for current deficits, do not change the need for reform to the system to address ongoing pressures” says Laura.  

Reeves said substantial plans for reform of SEND provision would be set out early in the new year. 

Increasing minimum wage 

On the topic of social care, increasing the national minimum wage will be sure to come as positive news to many care workers, but is likely to have a significant impact on already struggling care providers. The minimum wage for 18 to 20-year-olds will increase from £10 to £10.85, while the living wage for those 21+ will increase from £12.21 to £12.71.   

As highlighted by Nuffield Trust Senior Policy Analyst Sally Gainsbury, with almost a quarter of the 1.5 million strong care workforce paid within 10 pence of the Living Wage in 2024, even small increases can have a big impact on the cost of delivering care, and there is no new money to help the care sector with the impact. Industry analysis suggests that whilst additional funding may be announced through local government settlements, this is unlikely to fully cover the cumulative impact of wage increases and other cost pressures facing the sector. (Autumn Budget 2025: Implications for Care Homes and Adult Social Care) 

However, it’s not just the social care sector that will feel this hit.  

Schools and the NHS 

Reeves has pledged an extra £5m for secondary school libraries and £18m to upgrade playgrounds. She also promised savings of £4.9bn from a variety of efficiencies, which will be spent on more nurses and GP appointments, together with £300m of investment in tech to improve patient services and 250 new local patient health centres – Neighbourhood Health Centres. 

These new health ‘one stop shops’ will bring the right local combination from GPs, nurses, dentists and pharmacists together under one roof to best meet the needs of the community, starting in the most deprived areas. 

It will be key that local authorities, including public health, alongside the voluntary and community sectors, have a role in shaping these centres, drawing on their knowledge of populations and existing Joint Strategic Needs Assessments, so that they meet need and deliver integrated support. It will also be important that join up with existing community-based initiatives such as family hubs so that pathways are clear and accessible. 

Devolution and regions 

Reeves spoke of an additional £13bn of flexible funding for seven mayors to invest in skills, business support and infrastructure. Wales will be the host for two “AI growth zones”, creating more than 8,000 jobs, supported by a £10m investment in the semiconductor sector. Many of our team have been working hard over the past few months, leading the development of regional proposals for Local Government Reorganisation (LGR). “National funding flowing into regions to enable localised decision-making is great to see and will be interesting to follow how this develops as more areas continue the transition to Mayoral Combined Authorities”, said Alex Stoddart, Consultant at 31ten. 

The Budget confirmed the launch of place-based budget pilots, allowing up to five areas to pool funding across services locally and shape integrated investment plans. Although initially limited to Mayoral Combined Authorities, this approach signals a shift towards locally controlled, cross-cutting budgets rather than siloed Whitehall funding streams. 

“For areas going through LGR, this Total Place revival is particularly significant,” said Rahul Rana, Director at 31ten. “Place-based budgeting aligns naturally with the kind of whole system, prevention-focused reform that new unitary structures are trying to unlock. The fact that these pilots are currently restricted to existing mayoral regions underlines the opportunity and the risk for councils tackling reform. If LGR is to deliver genuine transformation, localities can’t just rely on structural change – they need control over the financial levers that make integrated planning possible.” 

Housing & property  

Although a heavier council tax reform was rumoured, what transpired was in fact a ‘High value council tax surcharge’ (the Mansion Tax) in England, an annual £2,500 charge for properties worth more than £2m, rising to £7,500 for properties worth more than £5m.

Property website Rightmove reported that “less than 0.5% of all home sales agreed this year have been for properties with an asking price of over £2 million, and around 1% of homes for sale are priced above this threshold.” (Autumn Budget 2025: What does the Budget mean for housing?) 

The likely impact here on the housing market is therefore immaterial, but could lead to distortion at the top end.  

The new surcharge will be collected by local authorities, alongside normal council tax. However, the money raised will go to central government, not to local councils. The government has said that local authorities will be “fully compensated” for the additional administrative burden of collecting the surcharge.  

Although widely rumoured, no changes to stamp duty were announced. 

Finally, the additional 2% income tax on rental income for landlords will ultimately reduce net returns for landlords, which may be passed to tenants via increased rents. Alternatively, landlords may decide to exit the market entirely if suitable risk-adjusted returns cannot be achieved. Both outcomes could reduce renter choice and may increase pressure on temporary accommodation in locations where the private rental sector no longer meets resident needs.

Business rates

The Budget also announced a reduction in tax on retail, hospitality and leisure properties, through lower business rates multipliers for these types of properties. “Many of our clients that are working to revitalise town centre locations will be pleased to see that the government recognises the need for continued support for retail and leisure occupiers, which bring life to these places”, said Rob White, Director at 31ten.

This reduction will be funded by an increase on the most valuable properties, with rateable values of £500,000 or more. While this amount aims to target online retail fulfilment centres, it will capture a wide range of other occupiers. Those affected will see increased occupier costs, which would likely feed into capital values over time.

Further use of Business Rates Retention (BRR) is also encouraged in the Budget, with the Greater London Authority’s enhanced arrangements extended, alongside pilots in Cornwall, West of England and Liverpool City Region. The Leeds City Fund, a 25-year 100% retention scheme, is supported (subject to a business case), and Business Rates Retention schemes for Mayoral Strategic Authorities are also noted as being considered.

“We are working with a number clients on business rates retention projects and they will be pleased that the government continues to recognise the opportunities in this area” said Rob, “given the government’s ambitions for growth it is important that approaches like BRR are supported, which can be critical tools for funding the upfront infrastructure required to enable the delivery of homes and workplaces in strategic locations”.

Infrastructure & planning

Planning reforms through the Planning and Infrastructure Bill aim to accelerate approvals for large developments and Nationally Significant Infrastructure Projects, while an additional £48 million over three years will strengthen local planning capacity by funding staff and resources. Transport funding for city-region rail, bus, tram, and other connectivity projects will also increase, supporting local mobility and regional development. These measures aim to provide greater flexibility to prioritise projects, enable faster delivery of infrastructure and housing developments, improve planning efficiency, and create opportunities for regional growth and regeneration.

In conclusion…

In the upcoming Local Government Finance Settlement, the government will explain in more detail how it plans to help local authorities manage past and growing deficits, and what conditions will apply to that support. This may also be when we see how far the emerging place-based budget pilots and wider regional funding reforms extend beyond existing mayoral areas, with clear implications for places exploring LGR. 

In the meantime, 31ten remains committed to creating lasting and meaningful impact within communities, helping local authorities to navigate change and deliver improved outcomes. 

If you’d like to discuss any of the themes set out in this blog, please get in touch.