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FINANCE

One in 10 county councils facing effective bankruptcy

England’s county and unitary authorities are ‘running out of road’ to prevent insolvency, with one in 10 not sure they can balance their budgets this year.

England's county and unitary authorities are ‘running out of road' to prevent insolvency, with one in 10 not sure they can balance their budgets this year.

A Society of County Treasurers survey of its 41 member councils, carried out with the County Councils Network (CCN), revealed a total funding gap of £1.6bn this year.

Shortfalls of £1.1bn and £1.3bn in 2024-25 and 2025-26 meant the councils were facing a £4bn deficit over the next three years.

The local authorities plan to reduce the deficit by half, with £2bn of ‘unprecedented' further savings pencilled in over the three-year period, including £1bn this year.

This leaves them with a collective £639m overspend for 2023-24.

CCN finance spokesperson Barry Lewis said: ‘The number of vulnerable children requiring care has risen dramatically post-pandemic, while inflation and a broken provider market in statutory care placements mean councils face no choice but to pay spiralling fees.

‘A decade of continuous cutbacks, the scale of reductions and use of reserves needed to fill the funding shortfall is simply unsustainable.'

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