Survey reveals councils' financial pressures

In a survey by the Local Government Association, one in four councils have said that they are likely to have to apply for emergency government bailout agreements to stave off bankruptcy in the next two financial years.

The LGA is calling on the government to take action in the Autumn Budget to 'stabilise council finances and avoid another hammer blow being delivered to local services'.

The government also wants to work alongside the government to ensure councils receive multi-year finance settlements and a cross-party review is set up into how the local government funding system should be reformed.  

This year, 18 councils were given Exceptional Financial Support (EFS) from the Government in February to help meet their legal duty to balance their books.

The survey shows that around one in 10 councils say they have discussed the possibility of requesting EFS from the Ministry of Housing, Communities and Local Government and 25 per cent are likely to apply for EFS in 2025/26 and/or 2026/27 without additional government funding.

Cllr Louise Gittins, LGA Chair, said: “Councils are the backbone of communities. Every day they strive to protect vulnerable children and families, support our older or disabled loved ones to live independent lives, keep our streets clean and pothole-free and build affordable homes but this is becoming increasingly difficult.  

“The unprecedented emergency support given to councils this year reveals the extraordinary funding emergency facing local government. As our survey shows, many more councils are being pushed into a precarious financial position.

“This is not just about numbers on a spreadsheet. Budget cuts needed to plug growing funding gaps will affect the most vulnerable members of society and the services our communities rely on every day.

“The Autumn Budget must provide councils with the financial stability they need to protect the services our communities rely on every day.”