Councils in England are now facing a colossal £7 billion funding black hole, amid unrelenting pressures on frontline services, writes Local Democracy Reporter, Daniel Holland.
New analysis from the Local Government Association warns that costs and demand in areas like social care, children’s services, homelessness support, and school transport for children with special needs are continuing to escalate.
The organisation said it expects the national council funding gap to reach £7 billion by 2028/29 – a financial cliff edge that risks “longer waits for adult social care assessments, rising homelessness, and cuts to neighbourhood services including road maintenance, libraries, parks and waste collections”.
In the North East, the seven local authorities across Tyne and Wear, Northumberland and County Durham are facing a combined shortfall totalling more than £200 million over the next three years.
In the week that would-be Prime Minister Andy Burnham promised to redress a “stark imbalance” in resources between local and national government, the LGA is now calling for the next Downing Street administration to deliver a new deal to protect essential services “ that is not reliant on council tax rises, short-term fixes and unsustainable emergency bailout arrangements”.
It said that the projected £7 billion gap is so large that it amounts to more than the current English council spend on roads, transport, homelessness and housing services put together.
LGA experts predict that, by 2028/29, it would cost councils 22% more than their current spending levels just to keep services at their current levels.
The LGA has also reiterated calls for long-term reforms – including a review of the council tax and business rates system, and to SEND and social care.
Colin Ferguson, the Lib Dem leader of Newcastle City Council, accused successive governments of having “neglected local councils for too long”.
Newcastle City Council has a projected funding gap of £37 million over the next three years and says that, by the end of that period, it will have had to make £434 million of savings since 2011.
Coun Ferguson added: “Fair funding for local government, including well-run councils like Newcastle, needs to be higher on the agenda for the new Prime Minister. Sticking plaster bailouts, as we have seen elsewhere in the country, are no way to support vital local services.
“Andy Burnham talked about greater devolution for regions, which we would welcome, but it can’t just be funding for regional mayors. Local councils, and cities like Newcastle, must have a seat at the table, better funding, and greater freedom to act.”
Labour ministers did announce major council funding changes last year, aimed at providing longer-term settlements to give greater certainty and diverting more money to deprived parts of the country that were “penalised” under previous formulas.
But that also sparked concerns in rural areas like Northumberland, where Tory councillor Nick Oliver has accused the government of “kicking the can down the road”.
Northumberland County Council will need to make more than £18 million in savings this year, followed by a further £34.6 million by 2029.
Coun Oliver, the council’s cabinet member for finance, said: “Northumberland’s settlement over three years didn’t even come close to covering inflation, never mind rapidly increasing demand for adults and children’s social care.
“The new Prime Minister needs to face up to these big issues and give councils the freedom and financing they need to deliver locally.”
36 councils across the country, including Redcar and Cleveland, have been awarded exceptional financial support from Whitehall in order to balance their books this year.
And the LGA warns that only a “significant increase in resources” across the board can ensure town halls are sustainable.
Its chair, Labour councillor Louise Gittins, said: “Without action, the services people rely on every day, from social care to safe streets, will be eroded. Whoever takes up the keys to Number 10 will have a lot of competing priorities. But fully funded, sustainable public services will need to be at the heart of any plans to improve lives and inspire hope in the future.”
Elsewhere in our region, councils report projected funding gaps by 2029 of £33.7 million in Gateshead, £23.6 million in Sunderland, £35 million in South Tyneside, £9.5 million in North Tyneside, and £31.7 million in County Durham.
Stephen Ballantyne, North Tyneside Council’s interim director of resources, said that savings targets of £25 million it must make this year will be “challenging”.
He added: “Like councils across the country, we are dealing with rising demand for services and increasing costs. Our focus is on responsible financial management, delivering efficiencies, and protecting essential services for residents. We will continue to plan carefully and take the necessary decisions to maintain the Authority’s financial stability.”
The Ministry of Housing, Communities and Local Government was contacted for a response.
Daniel Holland
Reporter for the Local Democracy Reporter Service.
South West Durham News covering news across County Durham.
