Laura Sharman 06 March 2020

Councils face £6.5bn funding gap by 2025

Councils face £6.5bn funding gap by 2025 image

Local services are facing a £6.5bn funding gap over the next five years, town hall chiefs have warned today.

The Local Government Association (LGA) said that while extra money has managed to halve the funding gap in 2020/21 compared to the year before, rising cost pressures and unprecedented demand will see the gap rise again significantly by 2025.

Adult social care services are facing the shortfall at £3.9bn - making up almost two thirds of the overall gap.

The LGA is calling on the Government to provide urgent clarity about the timing and implications of the Fair Funding Review.

It also wants more information on how business rates reforms will affect plans for councils to keep more of business rates income collected locally.

Cllr James Jamieson, chairman of the LGA, said: ‘Councils continue to face severe funding and demand pressures that continue to stretch local services to the limit and a funding gap that could reach almost £6.5 billion by 2025.

‘The Budget and the Spending Review need to provide a sustainable, long-term funding settlement for councils which means they can improve services and not just keep them going.’

Leaving nothing to chance image

Leaving nothing to chance

The ‘levelling-up’ Budget is era-defining and ambitious in scope – but we will have to wait until the summer Spending Review to understand the blueprint, says Localis’s Jonathan Werran.
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