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Councils across England, Scotland and Wales face potential cuts of £4bn for the coming financial year, “way beyond” any previous estimates, according to research by the Unison union published today.
The new figures from the UK’s largest union is based on information from local authorities, and shows council funding is in a “dire state” with massive cuts likely to essential services and jobs.
The report, Councils on the Brink, warns that failure to rectify the growing problem soon risks “the widespread collapse of local government”. It’s published to coincide with the Trades Union Congress in Brighton.
It piles pressure on the new Labour Chancellor, Rachel Reeves, to avoid further cuts in her first major decision-making test, the Government’s first budget on October 30th.
Many authorities could be forced to sell land, buildings and other capital assets, as well as cut back vital community services like rubbish collection and recycling, libraries, public toilets and leisure centres even further, Unison warns.
According to the union’s research, the five councils with the biggest projected shortfalls for 2025/26 account for a half-billion pound funding gap. These are Hampshire County Council (£132m), Bradford City Council (£126m), Birmingham City Council (£119m), Somerset Council (£104m) and Leicester City Council (£90m).
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Many local authorities have already made, or are planning, further cuts to services in an attempt to balance the books ahead of their budget-setting meetings in February and March 2025.
These come on top of well over a decade of major cuts and include:
- Derbyshire County Council proposes to close up to 11 elderly care homes and 8 day centres for the elderly.
- Hampshire County Council halving the funding it provides for wellbeing centres. These provide support for people recovering from mental health issues.
- York City Council asking residents how to cut £30m over the next three financial years, and Kent County Council launched a public consultation into tens of millions of pounds of savings
- Shropshire Council cutting up to 540 jobs and planning to end the 24/7 provision of CCTV monitoring
- Nottingham City Council planning to close four public libraries.
- Peterborough City Council recently halving its funding to a dementia resource centre
Byline Times has also reported on dozens of councils selling-off the “family silver” – local assets owned by the taxpayer but soon to be offloaded to private buyers.
Councils Across UK are Holding Fire-Sales of Public Assets from Libraries to Farms – Often with No Consultation
Councils are flogging off local treasures as cuts continue to bite. This is a list of just some of the assets currently on the market
In the Red
The growing disparity between the funds local authorities require and what they actually have available to spend is forcing them to make drastic cuts to vital services and jobs, which Unison warns could have devastating and wide-ranging consequences for communities.
For instance, Hampshire County Council intends to eliminate all funding for homelessness support services throughout the county starting from March 2025.
This March, Birmingham City Council, the largest local authority in Britain, approved one of the most extensive local government cost-cutting plans in history. This includes proposals to eliminate up to 600 positions, significantly reduce funding for social care and children’s services, and cut back on waste collection services.
As Middlesbrough Council attempts to save an additional £21m by 2026/27, it has allocated £3.6m for future redundancies. East Riding Council has informed its employees that it may eliminate any position that has been unfilled for more than six months.
Unison warns that without immediate government intervention, the total funding deficit could skyrocket to £8.5bn by 2026/27, leaving many councils struggling to deliver essential local services and safeguard jobs.
Unison’s projections, which are based on freedom of information requests and councils’ own financial forecasts, present a much grimmer outlook compared to others. In England alone, the union claims the funding gap could reach £3.4bn by 2025/26, considerably higher than the £2.3bn forecast published by the Local Government Association for English councils in June.
Bankruptcy Risk
Years of austerity mean services have already been cut substantially, with widespread job losses and a reduction in vital support for some of the UK’s most deprived areas.
Many local authorities are now on the brink of financial collapse and the union says this new data suggests “many more” could soon follow suit.
Since 2018, eight councils – including Birmingham – have issued so-called Section 114 notices, meaning they risk failing to meet the legal requirement to balance their books.
Unison’s data also reveals the local authorities facing the biggest predicted funding gaps relative to their annual budgets. While unitary or county councils delivering vital adult care and children’s services remain under enormous pressure, the huge financial strain on many district councils is even more apparent when measured this way.
At Eastleigh Borough Council, the estimated £4.9m funding gap for 2025/26 represents 37% of its £13.1m annual revenue budget. Other councils where predicted shortfalls represent a considerable pr