By Harry Mottram: Without new funding or massive cuts to services local authorities will go bust this and next year. Some are already insolvent meaning local people will pay more for less – libraries shut, recycling centres curtailed, youth projects slashed, home care trimmed and even police numbers reduced. The list of councils that are either bust or about to go bust is growing as they issue section 114 notices – effectively freezing all non-statutory spending. Essential services such as social care, schools etc are safe albeit with no extra funding while some services are liable to go, are privatised or sold off – and council properties often sold as well.

In 2018, Northamptonshire County Council issued a section 114 notice – the first local authority to do so for 20 years. Since then Slough, Croydon, Thurrock, Woking, Birmingham City and Nottingham City have issued notices. In Bath the head of the Bath and North East Somerset (BANES) Cllr Kevin Guy has said they will run out of cash by next year. Somerset, Hampshire and Kent have all hinted they may follow shortly and issue a 114 notice – while a growing list of authorities have high levels of debt such as Uttlesford, Cherwell and Hastings.

Funding from central Government is generally reported as having been cut by around 40% in real terms in the last 13 years while at the same time costs for councils have risen. An aging population, an increase in the statutory provision for children and adults in social care and for those who are homeless or in temporary accommodation has meant budgets are stretched further. Critics will and do point at inefficiencies in local government along with incompetence and failed projects such as Bristol Energy – but in general terms councils of all political hues are in trouble.

Writing in the Somerset County Gazette last October Phil Hill penned: “Budget figures going before the authority’s executive on November 8 are expected to show an estimated £70million rise in expected adult social care costs for 2024/25.”

He continued: “The main driver is a £70million increase in adult social care costs, caused by proposed changes to national policy which aimed to make the cost of care fairer. Although the policy change was later abandoned by Government, in Somerset this has led to significant rises in the costs of residential and nursing care placements. Officers are currently drawing up savings proposals which will be voted on by the executive in December. It could involve selling assets and buildings, including offices; increasing council tax, fees and charges; job losses; and reducing council services.”

Somerset County Council has been controlled by the Liberal Democrats since the elections in 2022 following the ending of the district councils like Sedgemoor by the government’s Somerset (Structural Changes) Order 2022. The idea was to save money and end duplication but almost immediately following the creation of the unitary authority the county council declared a financial emergency, fearing a deficit of £100 million arising in part from an expected increase in the cost of adult social care.

My own theory is the government cannot allow councils to go bust – especially in an election year as it is a bad look. Also, people expect to get the services they pay for and will punish politicians they feel are responsible at the ballot box. So, either this Government or an incoming Labour one will find emergency funding to keep the various struggling councils afloat – and hopefully revise the way local Government is funded. Whether that happens of course is only a guess but clearly something needs to happen soon.