08 January 2019

More than a third of councils face financial failure

More than a third of councils in England are at risk of financial failure in the next decade, with one in five on track to reach breaking point in the next three years, a new analysis has found.

A report from Grant Thornton found the most vulnerable councils are London boroughs, with 78% (25) forecast to crash by 2028, while half of unitary authorities and metropolitan councils are expected to be at risk of financial collapse in the next decade.

Overall, fewer district councils are set to become at risk the next 10 years, most likely due to the fact they don’t have statutory responsibility for demand-led social care services - the largest financial strain for councils.

The new analysis comes after a turbulent year exposed the acute failure of many council finances, as authorities struggle under the pressure caused by budget cuts and the rising demand for social care.

Paul Dossett, head of local government, Grant Thornton UK LLP, said: ‘The local government sector is facing unprecedented demand and financial pressures, and the risk of financial failure has never been more acute.

The very public struggles of Northamptonshire and Somerset County Council’s this year demonstrate the intense distress many councils, and in turn their citizens, are facing.’

The report also suggests if the proposed reduction on Revenue Support Grants were to be implemented in 2019/20, and no alternative funding sources were found, more than half (52%) of all authorities would be at risk of financial failure in the next decade.

Mr Dossett added: ‘We have seen an inexorable rise in the number of councils dipping into their reserves, as they struggle to balance the twin challenges of continued reductions in Revenue Support Grant and rising demand in areas such as adult social care, children’s services and homelessness.

‘The pressure on these essential services has been widely publicised but now even those universally used services such as parks and pot hole filling are visibly declining in quality. These issues combined mean financial sustainability will continue to be the biggest challenge for local government for the foreseeable future.’

Read our feature looking at the top actions that local authorities could take in order to address the financial pressures they currently face.

SIGN UP
For your free daily news bulletin
Highways jobs

PRINCIPAL TRANSPORT PLANNING OFFICER

Hull City Council
£43693 - £46731
We have an exciting opportunity for an experienced professional to join our team in Hull as a Principal Transport Planning Officer. Kingston upon Hull, East Riding of Yorkshire
Recuriter: Hull City Council

HIGHWAYS AND TRAFFIC ENGINEER - 4 POSTS

Hull City Council
£43693 - £46731
We have several exciting opportunities for suitably qualified Highways Civil Engineers and Traffic Engineers Wilson Centre, 1st floor, Hull HU1 2AG
Recuriter: Hull City Council

Strategic Director, Finance and Resources (S.151 Officer)

Blackburn with Darwen Borough Council
£110,799 - £120,706
Blackburn with Darwen is a distinctive, welcoming and vibrant borough with a strong identity and a genuine buzz about the place. Blackburn, Lancashire
Recuriter: Blackburn with Darwen Borough Council

Residential Worker, Edge of Care Service

Durham County Council
Grade 7 £29,093 - £32,654 PAY AWARD PENDING
Join a Groundbreaking Team Supporting Families in Seaham Salary
Recuriter: Durham County Council

Bikeability Cycling Instructor

Durham County Council
Grade 4 £24,790 to £25,992 pro rata (Pay Award Pending)
The Road Safety Team are keen to recruit additional Casual Bikability Instructors to join our team of instructors delivering Bikeability cycle trainin Durham
Recuriter: Durham County Council
Linkedin Banner