Council leaders expect Section 114 notices

The Local Government Association (LGA) has warned that almost one in five council leaders and chief executives in England think it is very or fairly likely that their chief finance officer will need to issue a Section 114 notice this year or next due to a lack of funding to keep key services running.

The LGA is estimating that councils in England face a £4 billion funding gap over the next two years just to keep services standing and the Autumn Statement did not provide the additional funding needed to protect services from further cuts.

In 2024/25, councils will be able to increase general council tax by 3 per cent without the need for a referendum and those with social care responsibilities will be able to increase the adult social care precept by up to a further 2 per cent again.

The LGA survey also found that half of council leaders and chief executives are not confident they will have enough funding to fulfil their legal duties next year (2024/25) and nearly two thirds of council leaders and chief executives said there were no announcements in the Autumn Statement that they thought would help them deal with their council’s financial position.

Cllr Shaun Davies, LGA Chair, said: “The lack of funding for local services in the Autumn Statement has left councils facing a growing financial crisis.

“No council is immune to the risk of running into financial difficulty. As our worrying survey shows, many now face the prospect of being unable to meet their legal duty to set a balanced budget and having Section 114 reports issued.

“Local government is the fabric of our country, with councils providing hundreds of services that our communities rely on every single day. For many people, these services are a lifeline.

“If councils cannot thrive then our communities cannot thrive. If social care services that councils provide cannot cope with demand, then pressure on the NHS will grow further. If council housing teams can’t succeed, then all of our hopes for new homes will not succeed.

“While councils have worked hard to reduce costs, find efficiencies and transform services, the easy savings have long since gone. The Government urgently needs to act to address the acute financial challenges faced by councils.”

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