Failure to address an estimated £4bn black hole in the finances of councils across England, Scotland and Wales could lead to the 'widespread collapse of local government', a trade union has warned.

Research by Unison found that councils across the three nations faced a collective funding shortfall of £4.3bn in 2025-26, with the figure rising to £8.5bn by 2026-27.

Unison's figures, based on Freedom of Information Act requests and councils' own financial forecasts, surpass the estimates of the Local Government Association (LGA).

In June, the LGA estimated that councils in England faced a funding gap of £2.3bn in 2025-26, rising to £6.2bn by 2026-27. 

Unison general secretary Christina McAnea said: ‘Councils are teetering on the brink of financial disaster.

'Countless essential services and very many vital jobs are at risk, with terrible consequences for communities across Britain.'