Councils’ financial crisis spirals spirals

The House of Commons cross-party Levelling-Up, Housing and Communities Committee has called on the government to fix a “£4 billion hole” in council funding arrangements for 2024-25 or risk severe impact to council services — and more local authorities in England facing effective bankruptcy.

Committee chair Clive Betts MP described “an out-of-control financial crisis in local councils across England” as a result of increased demand for services, including social care and special educational needs and disabilities provision, “rocketing costs”, and levels of funding failing to keep track.

The committee also called on the next government to reform Council Tax and the wider funding system for local authorities to ensure their finances are put on a sustainable footing.

The UNISON public services union previously said that plans by government to provide a £500 million emergency bailout for English councils “won’t magic away the massive financial shortfall councils face”.

In response to Nottingham City Council’s proposed 100% cut to its entire cultural budget following its section 114 “bankruptcy notice”, Musicians’ Union Midlands regional organiser Stephen Brown said the union was “appalled with the Council”.

But, he said, “the main culprit is the government which has abandoned local authorities over the last 14 years, forcing them into bankruptcy.