LGA and County Councils Network separately warn of more section 114 notices after Autumn Statement disappointment

Councils are calling on the Government to urgently address local government finances after a survey from the Local Government Association (LGA) showed that almost one in five council leaders and chief executives think it is very or fairly likely their council will issue a section 114 notice this year or next.

The figures were published on the same day as another survey from the County Councils Network (CCN), suggested seven in ten county councils will be unable to balance their budget next year.

The LGA's survey, which took responses from around a third of council leaders and chief executives in England, also showed that half of councils are "not confident" that they will be able to fulfil their statutory services next year.

In publishing the data, the organisation raised concern about last month's Autumn Statement, claiming it "failed" to provide the additional funding needed to protect services from further cuts.

Nearly two-thirds of council chief executives and leaders said there were no announcements in the Autumn Statement that they thought would help them deal with their council's financial position, the LGA survey showed.

Cllr Shaun Davies, LGA Chair, said the lack of funding for local services in the Autumn Statement "has left councils facing a growing financial crisis".

He added: "No council is immune to the risk of running into financial difficulty. As our worrying survey shows, many now face the prospect of being unable to meet their legal duty to set a balanced budget and having Section 114 reports issued.

"Local Government is the fabric of our country, with councils providing hundreds of services that our communities rely on every single day. For many people, these services are a lifeline."

According to the LGA, councils' core spending power has fallen by 27% in real terms from 2010/11 to 2023/24.

Local Government has also suffered the impact of the pandemic and the rising demand and costs for services (particularly statutory services like social care and homelessness support), the LGA stated.

Cllr Davies said: "While councils have worked hard to reduce costs, find efficiencies and transform services, the easy savings have long since gone. The Government urgently needs to act to address the acute financial challenges faced by councils."

The CCN's survey, also published today (6 December), suggests county councils are now planning more severe cuts, and seven in ten are no longer confident they can deliver a balanced budget next year in light of the Autumn Statement.

In light of the pressures, county council leaders have called on the Department for Levelling up, Housing and Communities to provide more funding for councils in the forthcoming Local Government Finance Settlement, due to be unveiled this month.

Cllr Barry Lewis, Finance Spokesperson for the County Councils Network, said: "We understand that public finances are tight but the Autumn Statement provided no further funding to help ease the existing financial pressures for councils - pressures which are largely outside of our control. In fact, those have been added to with the increase in the National Living Wage, adding hundreds of millions to our budgets."

Cllr Lewis said the survey results show county councils' financial positions are "significantly worse" than before the Autumn Statement.

He added: "The majority of the County Councils Network's member councils will now have no choice but to increase their planned level of service reductions, reduce investment on growth-creating capital projects, and levy higher council tax rises: all of which impact our residents.

"For some even this drastic action will not be enough, with seven in ten now no longer confident they can balance their budget next year."

Cllr Lewis urged the Government to provide additional funding for children's social care and school transport services in the Local Government Finance Settlement.

Adam Carey