Its manifesto ahead of July’s general election is urging the next government to take urgent action “to avoid hundreds of councils plunging into effective bankruptcy” with one in 10 threatened with running out of money this financial year.
Just 4% of councils have confidence in the sustainability of the local government financial system.
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Challenges in next parliament
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General Election 2024: What the children and young people's sector wants to see from the next government
Already this year, 19 councils have been granted permission to sell local assets and borrow more to balance their books, says the LGIU.
It wants to see councils given more autonomy over how they spend money to meet local needs, and their funding system overhauled to ensure they “can be financed effectively and sustainably”.
“National success has local foundations, and the next government needs functioning local authorities to deliver its national mandate,” said LGIU chief executive Jonathan Carr-West.
“However, with half of all councils expected to go bankrupt within the next government’s first term, none of the parties’ manifestos adequately address the urgent financial crisis in local government.”
He added that over the last seven years, eight councils have “already gone bust resulting in residents’ council tax doubling while public services are decimated”.
Will the next UK government introduce the policies needed to ensure a resilient #localgov sector? Our new chart looks at how the main parties' promises stack up against the urgent reforms we have called for #GeneralElection2024 https://t.co/Y7dshHIPvC pic.twitter.com/YRpZwTW4XZ
— LGIU (@LGiU) June 19, 2024
Support of children and young people is among services to be impacted. In April economists warned that councils in England face an annual shortfall of £332mn in youth homelessness funding.
Meanwhile, in March councillors in Birmingham approved £100mn in cuts to children and family services as part of the biggest budget cuts in the local authority’s history.
Council body the Local Government Association warned earlier this month that local authorities in England face a £6.2bn funding gap over the next two years, driven in part by rising pressures on children’s services.
In its manifesto the British Association of Social Workers is calling on the next government to commit to £2.6bn funding for children’s social care to counter funding cuts in recent years. This amount was set out by Care Review chair in his final report to government as the cost of implementing reforms, however, the last government only offered £300mn to pilot recommendations.
Tackling high costs of residential care facing councils, including bringing in a price cap, is needed according to the County Council’s Network’s manifesto. County councils face a £2bn funding black hole over the next two years, warns the local government organisation.
