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Half of councils could be bankrupt within five years, think-tank warns

2 mins read Children's Services Social Care
All political parties are underestimating the financial crisis in local government with half of councils bracing themselves for bankruptcy within five years, according to think-tank the Local Government Information Unit (LGIU).
Demand on children's services is increasing cost pressures, council leaders say. Picture: Adobe Stock
Demand on children's services is increasing cost pressures, council leaders say. Picture: Adobe Stock

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.

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”.

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