Title

FINANCE

DCLG rejects sector's warnings of insolvency

Marsham Street’s top official has insisted councils can manage with their current budgets but refused to guarantee they would all balance their books next year.

Marsham Street's top official has insisted councils can manage with their current budgets but refused to guarantee they would all balance their books next year.

Grilled by MPs last week, permanent secretary at the Department for Communities and Local Government (DCLG), Melanie Dawes, insisted she was not ‘complacent' but rejected warnings by chief executive of the Chartered Institute of Public Finance and Accountancy (CIPFA), Rob Whiteman.

Mr Whiteman has said that some councils are ‘close to the brink' and that ‘insolvency is looming for some'.

Director of local government at CIPFA, Sean Nolan, added: ‘These are difficult financial times for all councils. For some, there are already clear warning signs that they may soon face stark budget positions.

‘Local authorities have been hit hard since the introduction of austerity and this is ongoing for the next few years.'

Ms Dawes said she had a ‘great deal of respect' for ‘very experienced' Mr Whiteman but went on: ‘I do not share quite the level of concern that he has expressed.

‘It is certainly the case that there are real concerns about the pressures on social care. Our experience so far is that councils are finding they can manage with these budgets. They are proving very creative and innovative about new ways of generating income and providing services.

‘There is no question there is pressure on the system. Local authorities have experienced some really challenging reductions overall in their budgets. They have a lot to teach the rest of the public sector in terms of how to go about finding efficiencies and being more imaginative about how to commission services.'

DCLG has said it does not ‘directly assess' the capacity of councils, though it does ‘monitor risk and, where relevant, service delivery and outcomes'.

Ms Dawes continued: ‘We keep a very close eye on the overall risk across the system and this is something that I have invested in significantly since I arrived at the department a few years ago as accounting officer. I believe we now have a good way of making sure we understand what the risks and pressures are.'

FINANCE

Budget: EFS set to soar next year

By Heather Jameson | 03 November 2026

The ‘outrageous’ use of exceptional financial support (EFS) is set to continue, with no new measures in the Budget to prop up finances, senior local governme...

FINANCE

Translating ambition on rough sleeping into action

By Jack Shaw | 03 November 2026

The Budget offers hope on rough sleeping, but big questions remain, says Jack Shaw.

FINANCE

If devolution cannot solve the youth jobs crisis, what is it for?

By Katie Johnston | 03 November 2026

Katie Johnston looks at how devolution can help local government tackle youth unemployment and drive inclusive economic growth.

FINANCE

Turning devolution and reorganisation ambition into something tangible for residents

By Caroline Green | 03 November 2026

Councils need clarity, partnership and certainty to deliver successful reorganisation and devolution, says Caroline Green.

Dan Peters

Popular articles by Dan Peters

-->