Councils at risk from service failure, report warns

A small number of councils are at risk of financial or service failure, a report published by accountancy firm Grant Thornton has cautioned. 

The report also warned that for the first time ever, one council could even be moved into special measures on financial grounds within the next year. 

The report read: “With large funding deficits still looming, service reduction or even failure is becoming a distinct possibility.

“We are finding greater financial uncertainty and risk in councils’ strategic financial plans [across all council types] as they continue to search for alternatives to service reduction, with far fewer options than they have had over the past five years.

“Unless the sector responds even more radically to austerity, demographic pressures and technological change, the future sustainability of a small minority of local authorities will become increasingly challenging.”

The research suggested there was particular concern among councils in the South-West of England, while the majority of chief financial officers conceded that reaching a tipping point was possible.