Labour warned funding cuts would be 'disastrous' as councils face £2bn 'black hole'
Reeves is being urged to consider the plight of councils in her Budget announcement next month
PA
The new Labour Government is being urged to "take action" and avoid further "disastrous" spending cuts as councils at risk of falling into a "£2billion black hole" next year without intervention.
As part of its submission to the Treasury ahead of the October 30 Autumn Budget, the Local Government Association (LGA) called on ministers to prioritise protecting local services and needs to take immediate steps to stabilise council finances and protect vital local services.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.
According to the association, there is a rising risk of systemic financial failure due to 18 councils reliant on being given Exceptional Financial Support by the Government in February to balance their books in 2024/25.
Based on LGA's analysis, councils in England are at risk of being hit with a £2.3bn funding gap in the tax 2025/26 tax year as a result of inflation and wage pressures.
This could rise to £3.9bn in 2026/27, resulting in £6.2bn across the space of two years.
Among the key drivers in soaring costs include children's social care, adult social care, councils' Dedicated Schools Grant and enforcing the National Living Wage (NLW).
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Continuing financial pressure is being placed on local authorities, LGA claims
PA
Due to these issues, local authorities are having to rely on financial reserves to offset these cost pressures and balance the books.
As a result, the reserves of councils which are not ringfenced councils’ plummeted by £1.7bn in 2022/23 and £1.1bn in 2023/24.
Around 42 per cent of local authorities were forced to draw on their reserves over this period which the LGA does not believe is a sufficient enough long-term solution.
Previously, the Government has warned that the Autumn Budget will be “painful” with departments being tasked with finding savings.
However, the LGA has reiterated any further local funding cuts would push many more councils towards potential ruin and collapse the delivery of local services.
As part of its call to action, the association is pushing for short-term change which included a large and sustained rise in overall funding that reflects public demand for service.
Furthermore, it's pushing for general funding for services instead of money being ring-fenced in order to reduce competitive bidding for support.
Cllr Louise Gittins, chair of the LGA, said: "Councils are the key to delivering the Government’s priorities, but the risk of financial failure across local Government is potentially becoming systemic. Councils already face a funding black hole of more than £2bn next year.
LATEST DEVELOPMENTS:
Rachel Reeves has asserted that "tough decisions" will need to be made
GB NEWS“Having already delivered £24.5billion in cuts and efficiencies, any further cuts on top of this would be disastrous.
“The Government needs to take action to provide councils with financial stability and certainty in order to unlock their full potential.
“Immediate financial support and long-term funding reform and certainty – alongside a focus on preventative spending - are essential to protect services and enable councils to fully contribute to the Government's agenda, from social care to housing, economic growth and tackling climate change.”
GB News has contacted the Treasury for comment.