English councils will receive a budget of £700 million next year.

The government has announced an extra £700 million to English council budgets next year as a “first step” in rebuilding their finances.

The top-up brings the extra funding for next year to around £2bn, on top of the £1.3bn announced in the October Budget.

But £515m of new funding has been earmarked to cover the impact of an increase in National Insurance (NI) contributions from next April.

The Local Government Association, which represents councils, said authorities would still “struggle to balance the books” amid widespread funding pressures.

As with the previous government, they will be able to increase council tax by up to 5% without a local vote, with local increases to be announced next year.

The provisional figures cover spending from April next year, and will be subject to consultation and possible further revisions in February.

Additional funding for next year includes £600m to be allocated to councils according to their level of deprivation, with a separate grant to help rural councils deliver “re-delivered” services.

Ministers argue that this will improve the system because councils in poorer areas are less able to raise revenue locally, but this has prompted a backlash from the County Councils Network, which represents senior county authorities. does

CCN said rural areas had lost out, and argued that deprivation was “not a significant indicator of which councils are in the most financial trouble”.

The argument is set to be raised further next year, when the government consults on introducing a stronger link between overall funding and deprivations from 2026 as part of wider changes to council funding.

Ministers say the new formula will take “rural effects” into account – but they could have a political tussle on their hands, with Tory councils in more rural areas likely to be short-changed.

Other future changes include a move towards a multi-year funding settlement, a promise in the Labor manifesto, with the government promising that the budget will cover at least two years.

Council tax bills will also move to monthly payments by default, rather than spreading payments over 10 months, taxes for social care will be shown separately and more information about how taxes are spent. with the

Next year’s settlement includes an extra £200 million to help councils with responsibility for adult social care to provide subsidies for care costs, bringing total funding in this area next year to £ 3.7bn will be

While the cash boost will be welcomed by the sector, providers have expressed concern about the impact of rising National Insurance (NI) costs.

Charities and private sector providers are ineligible for a pot of funding earmarked to reimburse public sector organisations, although the Prime Minister’s spokesman said a plan to reduce the hospice surge should be announced before Christmas. will

Although councils will share £515m to cover the increase in NI for their employees, the CCN argued that this amount is sufficient to cover the indirect costs of council services provided by private providers. It won’t happen.

The LGA has also argued that the additional costs to contractors would mean that some council services would become more expensive to deliver.

Shadow Local Government Minister David Simmonds said the Government’s funding increase was “packaged beautifully” but councils would find themselves “emptier than people expected” given the funding pressures. .

He added that councils also faced uncertainty over funding costs for next year’s local elections, after the government confirmed plans to merge councils this week. Major changes to the council map.