Displaying items by tag: council budgets

MPs have issued a stark warning that the Government must address a £4 billion funding shortfall in council budgets to prevent more local authorities from becoming bankrupt. In the past six years, eight councils have been unable to balance their budgets, compared to none in the previous 18 years. The cross-party levelling up committee highlighted the urgent need for action, with increased demands in social care, children's services, and homelessness exacerbating the crisis. The Local Government Association warns that one in five English councils are on the verge of bankruptcy, with many unable to fund essential services. Despite the Government's proposal to increase council funding by 6.5% for 2024-5, MPs argue this is insufficient to close the £4 billion gap. The Local Government Association acknowledges these challenges, foreseeing inevitable council tax hikes and service cuts. Despite the £600m support package for councils announced last week, MPs stress the need for more comprehensive financial solutions.