Councils across England are facing a projected £7 billion funding gap within the next three years, raising concerns over the future of key public services including social care, homelessness support and neighbourhood maintenance.
New analysis from the Local Government Association (LGA) warns that rising costs and growing demand for services are continuing to place severe pressure on local authority budgets. The organisation estimates the national funding gap will reach £7bn by 2028/29, which it says could lead to longer waits for adult social care assessments, rising homelessness and cuts to services such as road maintenance, libraries, parks and waste collections.
The LGA said the projected shortfall is equivalent to more than the current combined spending on roads, transport, homelessness and housing services across English councils.
In the North East, the seven local authorities covering Tyne and Wear, Northumberland and County Durham are expected to face a combined funding shortfall of more than £200 million over the next three years.
The warning comes as Greater Manchester Mayor Andy Burnham has called for greater devolution and a rebalancing of resources between local and national government.
The LGA is urging the next government to deliver a long-term funding settlement that does not rely on council tax increases, short-term financial fixes or emergency support packages.It also wants reforms to council tax, business rates, special educational needs and disabilities (SEND) funding, and social care. According to the LGA, councils will need 22 per cent more funding by 2028/29 simply to maintain services at their current levels.
Colin Ferguson, leader of Newcastle City Council, said local authorities had been neglected for too long. Newcastle is forecasting a funding gap of £37m over the next three years and says it will have delivered £434m of savings since 2011 by the end of that period.
Cllr Ferguson said: “Fair funding for local government, including well-run councils like Newcastle, needs to be higher on the agenda for the new Prime Minister. Sticking plaster bailouts, as we have seen elsewhere in the country, are no way to support vital local services.”
He added that while greater devolution would be welcome, local councils needed both additional funding and a stronger voice in decision-making.
Although Labour ministers introduced funding reforms last year aimed at providing councils with greater certainty and directing more money towards deprived areas, concerns remain over whether the changes go far enough.
In Northumberland, councillors say the settlement has failed to keep pace with inflation and rising demand for social care. Nick Oliver said Northumberland County Council would need to make savings of more than £18m this year, followed by a further £34.6m by 2029.
He said: “The new Prime Minister needs to face up to these big issues and give councils the freedom and financing they need to deliver locally.”
Thirty-six councils across England, including Redcar and Cleveland Council, have already received exceptional financial support from government to help balance their budgets.
The LGA argues that only a significant increase in funding will put local government on a sustainable footing. Its chair, Louise Gittins, said: “Without action, the services people rely on every day, from social care to safe streets, will be eroded.”
Elsewhere in the North East, projected funding gaps by 2029 include £33.7m in Gateshead, £23.6m in Sunderland, £35m in South Tyneside, £9.5m in North Tyneside and £31.7m in County Durham.
North Tyneside Council’s interim director of resources, Stephen Ballantyne, said the authority’s £25m savings target this year would be challenging.
He said councils across the country were continuing to deal with rising demand and increasing costs while trying to protect essential services.
