The Local Government Association (LGA) recently warned that a fifth of 151 local authorities were in danger of going bankrupt after several were forced to issue section 114 bankruptcy notices in 2023, most notably England’s largest council Birmingham.
Local government leaders and struggling councils point to the spiralling cost of delivering children’s social care services as a key factor in the deteriorating picture.
The financial challenges are affecting all types of councils, a recent report by the County Councils Network (CCN) revealed the projected funding shortfall from 2023-26 is expected to be £4 billion.
The CCN report states that 45% of the budgetary pressures driving these overspends is being caused by spending on children’s services and that spending on statutory services is set to rise to 60% by 2025, compared to less than 40% less than a decade ago.
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