Seven out of ten councils said they would struggle to balance their budgets following the government’s Autumn Statement, a survey found. Leaders of those bodies said that they would have to raise council tax by the maximum level permitted, cut services and dig into reserves.
The County Councils Network wrote to the Secretary of State for Levelling Up Michael Gove setting out their concerns. “For an increasing number, even this action will not be enough to balance the books, with CCN’s survey now showing that seven in ten of our councils are now unsure or not confident they can deliver a balanced budget next year,” they said.
Cuts
Councils have been hit with no new funding and having to meet the costs of paying increases in the national living wage. The latter measure would cost £230 million alone. Cuts will fall on staffing levels, adult social care services and school transportation.
Other plans could be shelved and services reduced, they warned. “Five in ten councils said they now were more likely to pause or cancel major economic growth and regeneration projects, such as leisure centres, as well as closing and/or changing the opening hours of both libraries and household waste and recycling centres,” CCN said.
Bankruptcy warnings
The Local Government Association (LGA) wrote to Gove separately saying more councils could file for bankruptcy, according to the Local Government Chronicle. That follows the decision recently by Nottingham City Council to file a section 114 notice following a £23.3 million budget overspend.
LGA found that one in five councils in England said they were likely to use a section 114 notice during the next year due to “a lack of funding to keep key services running.” It estimated that councils needed an additional £4 billion to keep services standing over the next two years.
Money
Gove said in a written ministerial statement on the issue: “We recognise the need to provide stability to the local government sector. At this year’s local government finance settlement, we are on course to provide an above-inflation increase in funding to the sector.” The government estimates its funding to the sector will increase by £4 billion in 2024 – an increase of about 6 per cent to council budgets.
