The latest tranche of emergency coronavirus funding for councils in England is to be allocated “in the fairest way possible”, ministers say.
County councils will get 65% of the £1.6bn pot and district councils 35%, based on population size and local authorities’ specific needs.
None of the money will be ring-fenced, with councils able to spend it as they see fit to address specific pressures.
A review of overall future funding due next year has also been put on hold.
Prior to Tuesday’s announcement, county councils had called for their social care budgets to be prioritised and warned of “unpalatable” decisions if an estimated £1bn in extra costs caused by the pandemic were not met.
The BBC’s political correspondent Alex Forsyth said the financial situation facing councils was “very tight”.
The fact that no money was being guaranteed for care for the elderly, she added, was likely to dismay care providers who are worried the funding won’t get through to them.
The government said the £1.6bn pot – part of an overall £3.2bn package of emergency support announced this month – would be shared on the basis of an up-to-date assessment of the financial challenges facing councils.
The support for district councils is slightly higher than expected, reflecting the disproportionate effect the lockdown is having on their budgets in terms of reduced income from parking charges and leisure facilities.
As part of the breakdown, the majority of the 192 district councils in England will receive more than £1m, which the government says will enable vital frontline services for the vulnerable and homeless to be protected.
“Councils are playing a central role in our national fight against coronavirus and the government continues to back them at this challenging time,” Communities Secretary Robert Jenrick said.
He said he was setting out “how the latest £1.6bn of this will be allocated to councils in the fairest way possible, recognising the latest and best assessment of the pressures they face”.
To further ease the pressure on councils, a review of their current resources and future needs designed to determine changes to baseline funding next year, will not go ahead.
Neither will a shake-up of business rates which would have seen the amount of rate income councils retain from High Street shops – many of which are now closed – rising from 50% to 75% in return for grants being phased out.
The body representing district councils said the announcements “could mean a very welcome half a billion pounds of funding certainty for district councils on the front line over two years delivering those final mile services”.
“This shows government recognises the incredible work of districts in supporting every family and business and the pivotal role they can play combating this virus and leading the local recovery,” said its chair John Fuller.
Ministers say they have acted swiftly and decisively to help councils deal with the crisis, including bringing forward £850m in social care grants and allowing town halls to defer £2.6bn in business rate payments.
But council leaders have warned that billions more in financial support may be needed to avert potential bankruptcies and have called for all losses of income due to the pandemic to be under-written by government.