Half of councils serving are worried they won't stick to their budgets

Half of councils serving some of England’s poorest communities are worried they won’t stick to their budgets

• Inflation means more than half of councils doubt they will be able to cover costs 
• Six in ten local authorities say they will be forced to take cost-cutting measures 

Fewer than half of councils serving some of England’s poorest communities are confident of keeping to their budgets, a survey reveals.

In a dire warning of the perilous state of local government finances, 47 authorities in the North, the Midlands and on the south coast say they will have to make savings totalling £700million on spending plans set just four months ago.

The impact of inflation means 55 per cent of the councils have doubts they will cover their costs and 15 per cent report they have less than an even chance of doing so.

Six in ten of the local authorities say they will be forced to take cost-cutting measures to reduce capital budgets set aside for key regeneration and infrastructure projects.

The results come from a survey by the Special Interest Group of Municipal Authorities (SIGOMA) of its councils.

Labour MP for Bansley Central Dan Jarvis (pictured) said annual Government funding settlements have compounded the problems

With a legal requirement to balance the books, councils will be forced to either further deplete their available reserves or cut planned spending, the research showed.

The majority of councils say that creates a risk that the standard will drop across services such as adult and children’s social care. 

Responding to the findings, Labour MP for Barnsley Central Dan Jarvis said annual Government funding settlements have compounded the problems.

He said: ‘After 13 long years of cuts, council finances are in a perilous position.

More than half of councils are concerned they will not be able to cover their costs due to inflationary pressures (File photo: A man with an umbrella outside the Bank of England) 

‘Current inflationary pressures and a funding cliff-edge mean that many councils may be forced to make further cuts.

‘This is the opposite of levelling up and will only exacerbate the cost-of-living crisis for millions.’

SIGOMA is campaigning for a new funding settlement for local authorities which enables long-term planning. 

The Department for Levelling Up, Housing and Communities was approached for comment.

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