CCN Analysis: Budget Pressures - Autumn 2023
This analysis sets out the scale of financial pressures facing county councils and unitary councils, incorporating acute inflationary pressures and demand for loical services.
This budget analysis, produced jointly by the County Councils Network (CCN) and the Society of County Treasurers (SCT), sets out the scale and trajectory of financial pressures facing county and unitary councils.
Based on a survey of 41 county and unitary councils, it shows that acute inflationary pressures and demand-led growth in statutory services are driving historically high overspends.
Despite increased funding, council tax rises and significant planned savings, the analysis finds county authorities under serious pressure, particularly for vulnerable children.
The survey reveals that:
- Councils face £3.7bn of additional cost pressures in 2023/24, driven mainly by inflation and rising demand.
- Councils are forecasting a combined in-year overspend of £639m in 2023/24, averaging £16m per council.
- Children’s services account for £319m of overspends, nearly 45% of the total, followed by adult social care (£179m, 25%) and education, transport and highways (£154m, 22%).
- Despite increased funding, council tax rises and almost £1bn of savings and cuts in 2023/24, councils still face a £603m budget gap this year.
- The cumulative funding shortfall is forecast to reach £4bn between 2023 and 2026, even after councils planned over £2bn of savings and service reductions.
- Confidence in setting a balanced budget is deteriorating rapidly: 1 in 10 councils are not confident this year, rising to 4 in 10 in 2024/25 and 6 in 10 by 2025/26.
The analysis makes a series of recommendations to government:
- Provide urgent emergency funding for children’s services, comparable to recent support for adult social care.
- Address the structural underfunding of demand-led statutory services within national funding settlements.
- Stabilise council finances to prevent unsustainable use of reserves and escalating service cuts.
- Develop a longer-term, sustainable funding framework that reflects inflation, demand growth and demographic pressures in county areas.