English Councils Facing Financial Crisis
A survey by the Local Government Association indicates that 25% of English councils could go bankrupt without government assistance. Councils face a critical funding gap over 2 billion pounds next year, impacting services like social care and education. The County Councils Network warns major councils may declare bankruptcy by 2027 if current financial practices continue.
A survey conducted by the Local Government Association (LGA) reveals that 25% of English councils could face bankruptcy if they do not receive government bailouts in the next two years.
Local councils are dealing with a critical funding gap exceeding £2 billion for the upcoming year.
Louise Gittins, LGA chair, described it as an 'extraordinary funding emergency' that threatens crucial public services.
To resolve this, the LGA has urged the Chancellor, Rachel Reeves, to stabilize council finances in the autumn budget.
They propose a multi-year finance settlement and recommend reviewing the local government funding system.
In February, 19 councils were provided government bailout agreements known as exceptional financial support (EFS) to fulfill legal financial obligations, granting permission to borrow money and sell assets.
This approach provided temporary financial relief, though it risks increasing future debt for councils.
The LGA survey indicates that 10% of councils are already exploring emergency support with the Ministry of Housing, Communities and Local Government.
Furthermore, 44% of councils with social care duties are likely to seek assistance in the following two years.
Rising demands in social care, special educational needs and disability (Send) services, and homelessness are exacerbating financial pressures.
Councils are considering service and staff reductions to manage costs.
The County Councils Network (CCN) warns that 26 major councils may declare bankruptcy by 2027 if the statutory override for Send deficits expires in March 2026.
Such changes could triple funding shortfalls and increase bankruptcy risks by 60%, with Send deficits projected to reach £2.7 billion by 2025-26.
Both CCN and LGA advocate for system changes to address the unmanageable high-needs deficits posed by rising Send costs.
Kate Foale, the CCN representative, acknowledged the 'immediate financial emergency' and emphasized that current systems do not serve parents, children, or councils effectively.
Local councils are dealing with a critical funding gap exceeding £2 billion for the upcoming year.
Louise Gittins, LGA chair, described it as an 'extraordinary funding emergency' that threatens crucial public services.
To resolve this, the LGA has urged the Chancellor, Rachel Reeves, to stabilize council finances in the autumn budget.
They propose a multi-year finance settlement and recommend reviewing the local government funding system.
In February, 19 councils were provided government bailout agreements known as exceptional financial support (EFS) to fulfill legal financial obligations, granting permission to borrow money and sell assets.
This approach provided temporary financial relief, though it risks increasing future debt for councils.
The LGA survey indicates that 10% of councils are already exploring emergency support with the Ministry of Housing, Communities and Local Government.
Furthermore, 44% of councils with social care duties are likely to seek assistance in the following two years.
Rising demands in social care, special educational needs and disability (Send) services, and homelessness are exacerbating financial pressures.
Councils are considering service and staff reductions to manage costs.
The County Councils Network (CCN) warns that 26 major councils may declare bankruptcy by 2027 if the statutory override for Send deficits expires in March 2026.
Such changes could triple funding shortfalls and increase bankruptcy risks by 60%, with Send deficits projected to reach £2.7 billion by 2025-26.
Both CCN and LGA advocate for system changes to address the unmanageable high-needs deficits posed by rising Send costs.
Kate Foale, the CCN representative, acknowledged the 'immediate financial emergency' and emphasized that current systems do not serve parents, children, or councils effectively.
