More than half of councils are likely to issue a section 114 notice within the next parliament unless funding is reformed, senior local authority figures have warned.
A survey of chief executives, leaders, cabinet members for finance and section 151 officers from 128 English councils found that 74 councils (58%) are ‘likely’ to issue an s114 within the next five years.
The Local Government Information Unit (LGIU) survey found that 14 councils are likely to issue an s114 in the next financial year alone.
Two-thirds of respondents said they would cut spending on services this year – up from around half in the same survey last year – including in adult social care (16% of respondents), children’s care (12%) and special educational needs and disabilities (10%).
More than one fifth (21%) of those surveyed said they intend to sell publicly-owned assets in a bid to stave off an s114.
The report said: 'Asset sales are not a sustainable way to fund local government because assets can only be sold once, and not necessarily at a time when they guarantee the maximum return.'
According to estimates from the IPPR think tank, 75,000 assets worth about £15bn have been sold by councils since 2010.
LGIU chief executive Jonathan Carr-West described the financial situation facing councils as ‘desperate’ and ‘ruinous’, and said the number of authorities facing financial crisis shows it is ‘no longer possible to blame individual governance issues’.
He added: ‘There clearly is a systemic issue and rather than bunging local government panicked injections of cash, whoever wins the next election will need to reform the entire system, bringing back multi-year settlements based on an area’s need and developing new ways of revenue raising.’
Earlier this week a Local Government Association survey found that two-thirds of councils will cut neighbourhood services in their 2024-25 budget.
For more on the local government financial crisis, check out our feature, Can local government take much more?
