Ellie Ames 31 January 2024

Council financial crisis ‘out of control’

Council financial crisis ‘out of control’ image
Image: Asim's_bg / Shutterstock.com

MPs have issued a stark warning on the ‘very real’ prospect of more councils in England ‘effectively going bust’ if the Government does not address a £4bn funding gap.

A new report by the Levelling Up, Housing and Communities Committee urges the Government to overhaul the ‘regressive’ council tax system, the business rates model, and wider local government funding.

It calls for local authorities to get billions more a year to fund adult social care, a full review of the Education, Health and Care Plan system, and reform to make Special Educational Needs and Disabilities provision financially sustainable.

Committee chair Clive Betts said: ‘There is an out-of-control financial crisis in local councils across England.

‘The Government must use the local government financial settlement to help bridge the £4bn funding gap for 2024-25 or risk already strained council services becoming stretched to breaking point.

‘If the Government fails to plug this gap, well-run councils could face the very real prospect of effectively going bust.’

The chair of the Local Government Association’s resources board, Pete Marland, said: ‘As the committee rightly highlights, cost and demand pressures will continue to stretch council budgets to the limit.’

Cllr Marland added: ‘The amount of funding available to councils is out of line with the requirements placed upon them.’

The vice chair of the Special Interest Group of Municipal Authorities (SIGOMA), Graham Chapman, added that even the available funding is poorly distributed to the disadvantage of more deprived areas.

He said: ‘The first step to financial sustainability will be to close the funding gap identified in the report, and ensure additional funding goes to where it is needed most.’

If this article was of interest, then check out our features, 'Preventing future Section 114 notices' and 'How to fix local government finance'.

SIGN UP
For your free daily news bulletin
Highways jobs

Part Time Pre-School / Nursery Assistant (term time only)

Essex County Council
Up to £23344 per annum + pro rata - equal to £12.10 per hour
Part Time Pre-School / Nursery Assistant (term time only)Permanent, Part Time£23,344 per annum, pro rata - equal to £12.10 per hourLocation
Recuriter: Essex County Council

Head of Planning and Place

Bassetlaw District Council
Up to £74,377.
Our recently adopted Vision 2040 provides a clear set of priorities to direct our resources Worksop, Nottinghamshire
Recuriter: Bassetlaw District Council

Bicester Garden Town Programme Manager

Cherwell District Council
Grade M
Cherwell District Council
Recuriter: Cherwell District Council

Senior Practitioner, Children and Families Hub

Essex County Council
Negotiable
Senior Practitioner, Children and Families HubPermanent, Part Time£43,477 to £52,302 per annum FTELocation
Recuriter: Essex County Council

Social Worker - Children in Care Specialist Team, West Essex

Essex County Council
£34712 - £46751 per annum
Social Worker - Children in Care Specialist Team, West EssexPermanent, Full Time£34,712 to £46,751 per annumLocation
Recuriter: Essex County Council
Linkedin Banner

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.