Councils have warned they are facing a £7 billion funding black hole in the next three years.

The gap is larger than the current council spend on roads, transport, homelessness and housing services combined.

The Local Government Association (LGA) has warned that this risks leaving residents facing longer waits for adult social care assessments, rising homelessness, and cuts to neighbourhood services including road maintenance, libraries, parks and waste collections. 

Ahead of its Annual Conference this week, new LGA analysis warns that by 2028/29, councils will face extra cost pressures equivalent to 22 per cent of their current spending just to stand still.

This increase is driven by rising demand for homelessness support, children’s services, adult social care, home-to-school transport and new national requirements like Simpler Recycling and the Emissions Trading Scheme.

So far this year, 36 councils having been granted exceptional financial support (EFS) by government to set balanced budgets.
 

The LGA has called for the next prime minister and their government to set out a new path for local services that is not reliant on council tax rises, short-term fixes and unsustainable emergency bailout arrangements.  

It also asked for the government to commit to deeper, long-term reform of government finance, including a cross-party review of council tax, business rates retention and other funding sources.

LGA Chair Cllr Louise Gittins said: “The cost and demand pressures facing councils are unrelenting. In just three years, councils will need around 25 per cent more money simply to stand still. Without action, the services people rely on every day, from social care to safe streets, will be eroded. 

“Whoever takes up the keys to Number 10 will have a lot of competing priorities. But fully funded, sustainable public services will need to be at the heart of any plans to improve lives and inspire hope in the future.  

“Councils want to get on with supporting people, boosting local economies and delivering local priorities. But they can only do that with the long-term funding they need, and public service reform.”