Research has uncovered a £3.5bn shortfall facing councils over the next financial year, revealing the ‘true scale of the dire state of local government funding’.

Just 14% of local authorities in England, Scotland and Wales said they were on course for a balanced budget in 2024-25, the analysis by trade union Unison found.

It discovered that 114 councils are at least £10m short of their planned spending requirements – and 15 are £40m short.

Birmingham City and Thurrock councils, which have both recently issued Section 114 notices, face the highest funding gaps: £164m and £157m respectively.

Hampshire County Council is £82m short, the next highest funding shortfall.

Next is Sheffield, which faces a major equal pay claim, followed by Bradford, which is set to become City of Culture 2025 – both with shortfalls of around £72m.

The overall picture is set to worsen, with local authorities’ cumulative funding gap looking to top £7bn in 2025-26.

The research is based on data relating to 369 (out of 371) local councils across Britain.

Unison general secretary Christina McAnea said: ‘Councils are on their knees. Ministers seem to care very little about public services and local government has been hit hard over very many years.

‘Essential services can't run on thin air. Staff levels have already been cut to the bone in desperate attempts to balance the books.

‘Yet more service cuts and job losses are sadly inevitable across the country unless the government intervenes with the lifeline of significant extra funding. Not just for those on the brink, but to councils everywhere.’

If this article was of interest, then check out our feature, 'How to fix local government finance'. and 'Righting the wrongs of equal pay'.