Labour’s Chancellor has made a big fuss over missing funding, so how is Rachel Reeves going to fill this £54 billion council ‘black hole’?

The rising cost of statutory services – that councils must provide – including social care, children’s services and home-to-school transport is likely to bankrupt some authorities by 2028, according to the County Councils Network (CCN).

According to Sky News,

The analysis found the three areas account for 83% of the total increase in the costs councils are expected to spend on services by 2030.

Annual council tax rises of 3% could reduce the overall deficit to £38bn over the next five years, it found.

However, the CCN, which represents county and unitary councils – 47% of the population – said the government “cannot rely” on 3% rises as councils would still be left to find billions each year.

This would lead to “undeliverable” service reductions, the CCN said.

And here‘s ITV News with the inevitable prediction:

The study found that without extra funding, ministers will have to “radically rethink” councils’ statutory responsibilities.

If they don’t, potentially six in ten county and unitary authorities in rural areas face declaring bankruptcy by 2028, the study says.

Without extra funding at a time when the profile of statutory responsibilities remains the same, 16 councils could be at risk of declaring effective bankruptcy by 2026-27, with a further six expected to follow in 2027-28. This amounts to 60% of the CCN’s members.

The situation may not be as bad as these people think, though. A government spokesperson has said,

“Despite the inheritance left, we will work with local government to fix the foundations and get them back on their feet by doing the basics right, including providing more stability through multi-year funding settlements, ending competitive bidding for pots of money, and reforming the local audit system.

“We will set out more detail at the next Spending Review and Local Government Finance Settlement but stand ready to speak to any council that is experiencing financial difficulties.”

So it seems the Labour government is preparing to produce the necessary wherewithal from… somewhere.

The question is: where?

Source: Rising cost of social care and school transport to cause £54bn blackhole for councils | Politics News | Sky News

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