Nearly three quarters of local authorities in England have warned it will be very or fairly difficult to set a balanced budget this financial year.
The Local Government Association (LGA) said this week’s Spending Review would be ‘critical’ for the future of frontline services, with councils facing an £8bn funding gap by 2028/29.
A new LGA survey found that two in 10 councils were ‘not very’ or ‘not at all’ confident they had enough funds to deliver all their statutory duties in 2025/26. This more than doubles to five in 10 in 2026/27.
The survey, which received 105 responses from chief finance officers, revealed that 71% of respondents said it would be very or fairly difficult to set a balanced budget in 2025/26. Among single-tier and county councils this jumped to 87%.
The poll also found a quarter of councils have applied for or are very/fairly likely to apply for exceptional financial support (EFS) to set a balanced budget in 2026/27.
Thirty councils were granted EFS this financial year – up from 18 the year before.
Only 3% reported that extra funding to cover the cost of the national insurance contributions (NICs) increase was enough, while four in 10 said half of their direct costs will not be covered.
Cllr Louise Gittins, LGA Chair, said: ‘Every critical service a council provides needs to be funded properly. Without adequate funding the consequences for so many people who rely upon them could be devastating, but it will also be impossible for them to help the Government achieve its reform and growth agenda.’
