GB News presenter Ellie Costello has warned that Labour chancellor Rachel Reeves may run out of options for budget cuts amid a growing council funding crisis.
Speaking on the programme, Costello remarked, “You can’t cut back anymore” as guest Suzan Holder discussed the dire financial situation facing local authorities.
Holder highlighted the shocking details of a Budget and Spending review, which revealed a £20.3 billion funding gap across 37 county councils.
This shortfall is primarily attributed to rising costs in adult social care, children’s services, and home-to-school transport for children with special educational needs and disabilities.
Holder expressed concern over how councils would address this shortfall, stating, “We can’t cut back on these things, but the things they will cut back on are the other key services.” She specifically mentioned libraries, buses, road maintenance, and children’s services as potential targets for cuts.
The County Councils Network (CCN) has warned of an even larger £54bn funding black hole across councils over the next five years.
This projection, based on analysis by PricewaterhouseCoopers, suggests that councils may soon be forced to abandon “nice to have” functions in favour of essential care services.
The CCN’s analysis found that adult social care spending in England is predicted to increase by £11.8bn from 2022/23 to 2029/30, while spending on children’s services is expected to rise by £8.4bn over the same period.
School transport costs are also projected to surge, with spending estimated to increase by £1.7bn in the next five years – a 90.1 per cent rise from 2022/23 to 2029/30.
Barry Lewis, CCN finance spokesperson, warned that without additional government funding, councils may soon be “providing little more than care services by the end of this parliament”.
The funding crisis is not limited to county councils. District councils are facing similar challenges, primarily due to rising costs of emergency housing for homeless families. Some districts are grappling with £1m overspends on temporary accommodation this year alone, according to the District Councils Network.
The situation has already led to several councils declaring effective insolvency in recent years, including Birmingham, Nottingham, Slough, Croydon, and Thurrock. These authorities were among 19 English councils granted special permission to use capital funds for day-to-day services to avoid bankruptcy.
A government spokesperson stated they would work with local authorities to provide more stability through multi-year funding settlements and reforms to the local audit system.
