More than two thirds (67 per cent) of councils warn that neighbourhood services, including waste collection, road repairs, libraries and leisure centres, are likely to see severe cutbacks due to funding shortages, a survey from the Local Government Association (LGA) reveals.
In January, the government announced that an extra £600m would be injected into local government budgets, as councils across the country warned that they may need to issue a Section 114 notice, which effectively declares them bankrupt. Since 2021, six local authorities have issued this notice. But the majority (58 per cent) of council chief executives who responded to the LGA survey conducted in February, following the funding boost announcement, said that the extra government funds would have a “small” impact on their overall financial security. The LGA invited the chief executives of all its member councils to take part in its survey, and 102 responded.
The LGA is urging Chancellor Jeremy Hunt to pledge further support in his 6 March Budget. “Acute funding pressures remain,” councillor Shaun Davies, the LGA chair warned, “and [they] are forcing many councils to make stark choices about what popular services to cut.”
More than four fifths (85 per cent) of local authorities report that, despite the £600m funding injection, they will still have to make cost savings to balance their 2024-25 budgets. Collectively, local authorities face a “funding gap” – the amount they need to keep services running as they currently are, relative to the money they are due to receive – of more than £4bn across the 2023-24 and 2024-25 financial years.
Increased demand for statutory Even though they’re mandatory, cuts on essential services are still likely: 75 per cent of respondent councils say cost savings will be needed in their adult care budgets, and 69 per cent say the same for children’s services.
To stem further cuts in statutory services, other provisions will have to be severely reduced or cut altogether. More than half (52 per cent) of councils, according to the LGA survey, anticipate making cost savings in at least three different neighbourhood services. These include sport and leisure (55 per cent), libraries (44 per cent), parks and green space services (48 per cent), and museums, galleries and theatres (34 per cent).
In its submission to Hunt ahead of the Budget, the LGA has repeated its call for the government to issue multi-year funding settlements (2024-25 marks the sixth one-year agreement in a row). Councils, it added, want more clarity on the potential for future funding reform so that “they can plan effectively, [and] balance competing pressures across different service areas”.
“This will not go unnoticed by our local communities,” warned LGA chair Davies on the prospect of cuts to neighbourhood services.
“Without further funding, cost and demand pressures will continue to stretch council budgets to the limit and lead to more of the cherished services our communities rely on every day from having to be drastically scaled back or lost altogether as councils are increasingly forced to do more with less,” he added.
[Read more: Council bankruptcy tracker: authorities under increasing financial strain]
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