28 September 2023 , 16:00
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Waste collections, libraries and leisure centres all face being hit as local authorities struggle to make ends meet.
Cash-strapped councils are grappling with a £3.5billion funding black hole for next year, risking cuts to jobs and vital services as town halls struggle to balance the books, a report warns today. Research by Unison found nearly a third of local authorities are at least £10million short of the money they need, while 4% have a funding gap of around £40million. Town halls will be forced to consider selling land and buildings, slashing services for the vulnerable, and vital community resources such as waste collection, libraries and leisure centres, the union warned.
Birmingham City Council and Thurrock Council, which have both effectively declared themselves bankrupt, have the worst funding gaps based on data from 369 (out of 371) local councils across Britain for 2024/25. It comes after nearly a third of councils in poor areas said they were considering issuing Section 114 notices, which would freeze all non-essential spending, according to the Special Interest Group of Municipal Authorities.
Birmingham is £164million short of its spending needs for next year, while Thurrock, in Essex, has a gap of £157million, data obtained through freedom of information requests shows. Sheffield City Council and Bradford City Council both face funding gaps of around £72million, while Liverpool City Council is short by more than £67million.
Of the 371 councils, only 62 (16.7%) reported no funding gap for 2024/25. The situation is expected to deteriorate further without a major cash injection in the Autumn Statement, Unison warned. It estimates the overall funding gap could rise to £7billion in 2025/26 without intervention.
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Unison General Secretary Christina McAnea said: “Communities rely on their local authorities for all manner of essential services, such as waste collection, road repairs and parks and other open spaces. But councils are on their knees. Ministers seem to care very little about public services and local government has been hit hard over very many years.
"Essential services can't run on thin air. Staff levels have already been cut to the bone in desperate attempts to balance the books. Yet more service cuts and job losses are sadly inevitable across the country unless the government intervenes with the lifeline of significant extra funding.
A Department for Levelling Up, Housing and Communities spokesman said: "Local authorities have seen an increase in Core Spending Power of up to £5.1 billion or 9.4% in cash terms on 2022/23, with almost £60 billion available for local government in England. We stand ready to speak to any council that has concerns about its ability to manage its finances or faces pressures it has not planned for.”
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