Unite has launched a campaign calling for an overhaul of how local authorities are funded to prevent further bankruptcies and job and public service cuts.
The public sector union warned that local government debt, which has doubled since 2010 to £122bn, is ‘spiralling out of control’ and called for council funding to be ‘urgently restructured.’
Unite general secretary Sharon Graham said councils have been spending ‘a fortune’ on interest repayments, mostly to the Treasury, at ‘unfairly enhanced rates.’
As part of the campaign, Labour MP Jon Trickett has tabled an early day motion calling for local government debt to be restructured to protect against the need to cut jobs, pay conditions and public services.
Graham added: ‘There now needs to be an immediate overhaul of how all councils are funded before it is too late.’
While funding per person is set to increase by 7% by 2025-26, the Local Government Association (LGA) estimates councils will face an £8bn budget gap by 2028-29.
LGA chair Cllr Pete Marland said a lack of reform had left councils with ‘a complex, outdated funding system’.
He added: ‘Creating an improved and a more sustainable funding system for local government is also critical to strengthen the value for money of local spending and, most importantly, improve services for communities.’
For more on the topic of council funding and its impact on jobs, see Call for £1.5bn boost to care worker pay.
