![The council in Birmingham collapsed last year (Image: Darren Quinton/Birmingham Live)](/upload/news/2024/01/28/154081.jpg)
Nearly 14 years of Tory cuts have pushed a growing number of local councils onto the brink of collapse, an expert reveals.
And with 40 now at risk of joining the seven already made bankrupt, Dr Jonathan Carr-West said more ordinary people will start to feel the crippling effects of slashing vital services. The Mirror can today reveal a black hole of at least £1billion in council budgets.
Local Government Information Unit head Dr Carr-West warned No10’s £500million emergency funding announced last week will not be enough to stop a string of councils going bust under Section 114 notices.
He told how desperate town hall chiefs have never been so worried about the future of the services they provide, especially for the vulnerable in society. Care homes, buses, libraries, bin collections, street sweeping and lights face cuts as councils are further squeezed.
Dr Carr-West said: “The councils that are warning they might have to issue a Section 114 notice is just the tip of the iceberg. There are a whole bunch who think they are in serious risk of issuing a 114 but they haven’t made it public.
“When I talk to council leaders they consistently tell me this is the worst it’s ever been, that they are more worried than they’ve ever been. There’s a fairly familiar story that central government funding has been reduced by nearly 50% overall, but for some councils that is even around 90%.
“And the funding that does come is more short-term and less predictable. A lot is from the levelling up fund which councils bid for, so they don’t know year on year what they’ll get.
“If you live in an area that has not issued a 114, that doesn’t meant that everything’s fine, because many of those councils are still cutting to try to desperately stave off bankruptcy.
“Councils which aren’t issuing 114s are still closing libraries or reducing opening hours. They’re not mowing the grass in the park.
“You’re seeing eligibility criteria for care going up. You’re seeing councils turning down applications for education, health and care plans for children with special needs, you’re seeing street lights turned on for fewer hours. And yet you’re still seeing your council move further and further towards bankruptcy.”
Dr Carr-West said of the £500m emergency fund for councils: “It’s a sticking plaster solution and it’s not going to even hit the sides.
“The cynical view would be that it’s designed to push local government failing to the other side of the election.
“We’ve seen this steady drumbeat of councils issuing 114s, issuing warnings. The big question is will 2024 be the year in which that becomes a tidal wave for councils.
“It leaves the sector dependant on the whims of Whitehall. At the last minute they chuck us another £500million to get us out of trouble.”
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Rishi Sunak agreed to the funding last week, but only after 44 Tory MPs signed an open letter to the PM demanding more cash.
The Local Government Association has also warned councils face a total funding gap of more than £4billion over the next two years, with one in five fearing they will go bust.
The seven already declared bankrupt are Nottingham, Birmingham, Woking in Surrey, Thurrock in Essex, Croydon, South London, Slough, Berks and Northamptonshire.
Residents are reeling from cuts and council tax hikes. The 40 others at risk include Leicester, Bradford and Havering, East London. Leicester’s mayor Peter Soulsby warned in October bankruptcy is “almost inevitable” as the city faces a shortfall of £34.1m this year.
He added: “I now fear for the future of services such as parks, sports, museums, libraries, cultural services and our community centres.
“Indeed all those services that make our city such a pleasant place to live.”
Havering council leader Ray Morgon said their government funding has been slashed from around £70million in 2010 to under £2million today. They are planning to close libraries and children’s centres and raise council tax to above £2,000 a year in a bid to balance their devastated budget.
The situation is worst for those councils already bust. Woking declared itself bankrupt in June with an unpayable deficit of £1.2bn.
It has proposed £12m in cuts next year including the removal of all public toilets and the closure of a swimming pool, a theatre, three leisure centres and 13 sports pitches.
Town halls owe a combined £97.8bn to lenders, according to recent research.
Mother-of-three Sabiha Aziz fears Birmingham’s brutal cuts to services will have a devastating effect on the care received by two of her children, aged 16 and 18, who both have additional needs and disabilities.
The 47-year-old from Yardley says this month she applied for a wheelchair assessment for her eldest son Adam, who is severely learning disabled and has epilepsy and non-verbal autism, but was told he no longer meets council criteria.
She says: “My children are entirely reliant on the council’s provision, from home-to-school transport to short breaks and respite, but now we are hearing that every single service is going to feel the impact.
“It’s a lack of empathy that will end up pushing families into crisis. Everything is under review and the level of uncertainty is really stressful.”
Sabiha said of Adam: “I worry about the medication that keeps him alive, which has become more difficult to get hold of. I worry about his specialist college placement he’s due to start in 2025, which is wholly dependent on local authority funding, and I’m bracing myself for a fight because it’s going to be expensive for them.”
Sarah Newton’s dad, Ernest Skerrett, is living in a dementia care home which has been earmarked for closure.
She now fears that the trauma of moving him elsewhere could have a devastating effect on the seriously ill 81-year-old. The mum of two became her dad’s carer in 2020 when he was diagnosed with vascular dementia. He moved to the Castle Grange care home run by Kirklees council, West Yorkshire, in March last year.
Sarah, 44, says: “When he got a place at the care home, which is just a short walk from my home, it changed our lives. It’s a purpose-built home which allows residents to wander freely, interact, and be cared for by trained staff. He’s so happy there now.”
But last September, she found out the council was planning to close the home in Huddersfield. Sarah says: “It’s so short-sighted. It will end up costing more.
“Changes to routines can cause a rapid decline in people with dementia, and there are no other dementia homes in the area. It’s so cruel.”
The Government says the figure promised to councils is £600m, made up of £500m for social care and another £100m from an increase to the "funding guarantee", which sets out the minimum percentage annual increase in money before local decisions on council tax, from 3% to 4%.
A Department for Levelling Up, Housing & Communities spokesperson said: “We recognise councils are facing challenges and that is why we recently announced an additional £600 million support package for councils across England, increasing their overall proposed funding for next year to £64.7 billion – a 7.5% increase in cash terms.
“This additional funding has been welcomed by leading local government organisations, but we remain ready to talk to any concerned council about its financial position.”
Below is a list of councils which have warned of bankruptcy or are in financial peril, and their projected shortfall. ** indicates councils which have not warned of bankruptcy but admit they are in financial peril.