A small number of councils are at risk of financial or service failure, according to a new report from accountancy firm Grant Thornton.
The report warned that for the first time ever, one council could even move into special measures on financial grounds within the next year.
The report read: ‘With large funding deficits still looming, service reduction or even failure is becoming a distinct possibility.
‘We are finding greater financial uncertainty and risk in councils’ strategic financial plans [across all council types] as they continue to search for alternatives to service reduction, with far fewer options than they have had over the past five years.
‘Unless the sector responds even more radically to austerity, demographic pressures and technological change, the future sustainability of a small minority of local authorities will become increasingly challenging.’
The research found that the majority of chief financial officers conceded reaching a tipping point was possible, with particular concern among councils in the south-west of England.
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