The Outlook For Council Finances This Parliament

Our Outlook for Council Finances this Parliament report presents a detailed assessment of the financial pressures facing local authorities up to 2029/30.  

Drawing on new spending‑need analysis by PwC and funding projections by Pixel Financial Management, this report highlights a rapidly deteriorating fiscal position driven by surging demand in core services - particularly adult social care, children’s services and SEND‑related home‑to‑school transport.  

We warn that without urgent government intervention, councils will face unsustainable budget gaps, threatening their ability to deliver statutory services

Key findings:

• Total council spending need in England is forecast to rise by £26.3bn (46.7%) by 2029/30; CCN councils account for £11bn of this increase (up by 49.8%).  
  ‍
• Increases in adult social care (+£11.8bn), children’s services (+£8.4bn) and SEND home‑to‑school transport (+£1.7bn) account for 83% of national growth in spending need; for CCN councils it is 89%.  
  ‍
• Under the baseline forecast, the annual funding gap reaches £17.3bn by 2029/30; cumulatively £54bn, with CCN councils representing £20.3bn.
  ‍

• A 3% annual council tax rise shrinks the national cumulative gap only to £37.6bn; using all retained business rates reduces it to £28.7bn.  
  ‍
• With major reforms to care and SEND services, the cumulative gap could fall to £24.2bn.

Recommendations laid out in the report, aimed at government include:  

• Provide immediate financial stability, retaining all current funding streams and avoiding real‑terms cuts. Deliver a multi‑year sustainable funding settlement based on evidence of rising need.
  ‍
• Implement structural reforms to adult social care, children’s services and SEND transport to reduce long‑term cost pressures.
  ‍
• Review the role of council tax and business rates within a wider funding reform package.
  ‍

• Prioritise CCN councils in national reform programmes, given their disproportionate exposure to rising demand.