CCN Analysis - County Budgets 2022-24 - Counting The Costs of Inflation

This report contains our analysis of the severe financial pressures facing county and unitary authorities over the period 2022 to 2024: in the context of historically high inflation rates.

This research also incorporates figures from LG Futures and highlights that soaring costs in adult and children’s social care, energy, pay, and wider running costs have created an acute budgetary crisis, significantly exceeding earlier projections.

Despite councils taking steps to manage pressures, the scale of unfunded inflation costs leaves authorities having to make major service reductions, mounting deficits and growing risks to their financial sustainability.

We warn that without additional government support, councils will be forced to scale back essential services, cut investment in prevention, delay capital investment and potentially issue Section 114 notices.  

Key findings from the report:

• Inflation is expected to add £1.41bn in 2022/23 and £1.45bn in 2023/24 to councils’ revenue spending, creating a £2.86bn pressure for county councils and unitary authorities over two years.
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• Increased demand is predicted to add a further £317m in 2022/23 and £330m in 2023/24 to revenue costs, totalling £647m. Combined revenue pressures are predicted to reach £3.5bn across 2022–24.
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• Adult social care accounts for 49% (£1.7bn) of all cost pressures; children’s social care represents 20% (£667m).
  
• Even with increased council tax and business rates, county authorities face an £821m funding gap in 2023/24.

Recommendations to government include:

• Maintain existing Spending Review commitments and provide additional funding to offset inflation.
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• Delay adult social care charging reforms, reinvesting earmarked funds to stabilise services.
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• Redirect more NHS backlog funding to support social care capacity.
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• Avoid forcing councils int making real‑terms cuts that would force them to retreat to a “core offer” only.
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• Protect preventative services to avoid higher long‑term public costs.