Research finds councils could face a £5bn funding gap: CCN responds

CCN Latest News, CCN News 2023 | 21 August 2023

Today the BBC has published new research which finds that local authorities in England could face a funding black hole of £5.2bn by 2025/26.

The data is based on a a BBC survey, with the broadcaster asking all upper-tier councils how much they were required to save this year, and they projected deficit by 2025/26. Analysis of the figures by the County Councils Network (CCN) finds that its member councils could have to save £734m in 2023/24, based on 32 respondents.

This mirrors a survey from the CCN and the Society of County Treasurers earlier this year, which found that 40 county and unitary councils could have to save over £1bn in 2023/24.

Below, CCN responds to the data from the BBC, released today.

Cllr Tim Oliver, Chairman of the County Councils Network, said:

“This research by the BBC continues to demonstrate the scale of the financial challenges facing local authorities in England. Our own research published in March this year showed that county and rural councils needed to make over £1bn worth of savings to balance budgets in 2023/24, even after four in five reluctantly levied the maximum council tax rise.

“Despite the government increasing funding for councils over recent years, a combination of high inflation and rising demand has left county and unitary authorities facing some of their most toughest budgetary decisions to date this year. County authorities will do all they can this year to deliver these savings whilst protecting vital frontline services, particularly care services, but there is now little fat to cut after a decade of financial restraint and many councils are facing significant in-year overspends as a result.

“We must remember that while inflation is beginning to reduce, these costs councils have incurred won’t just disappear from our budgets overnight – they are now embedded into the future. Councils in county areas have also been historically underfunded, inevitably leading to higher council tax rates. The medium-term outlook therefore looks bleak unless these higher costs are recognised and councils are given longer term financial certainty, alongside delivering long promised reforms.”