“Councils face bankruptcy after Tory cuts open £25billion black hole in finances”

“Council leaders say government funding cuts will leave a £25billion black hole and plunge stretched local authorities into worse debt.

Research by the TUC and New Economics Foundation think-tank shows the plans will lead to greater suffering and even council bankruptcies.

Grants will fall almost to zero and plans to let councils keep income from business rates will not match the shortfall.

Nationwide, £16billion has been taken from the Local Authority Grant since 2010, equivalent to 60p in each £1.

Labour ’s Paul Dennett, leader of Salford Council, said this summer that
3,000 children in his area were given emergency food vouchers, police numbers have been cut by 2,000 and new foodbanks have been opened.

“Local government is on its knees,” he said.

“Without serious investment, we will soon see more bankruptcies in local councils, as has happened in Conservative-run Northamptonshire.”

The TUC report shows ringfenced government grants to councils have fallen from £32.2billion in 2009-10 to £4.5billion in 2019-20, and are expected to be cut further by 2024-25.

TUC General Secretary Frances O’Grady warned: “A colossal hole will be left in local budgets and the poorest communities face the biggest shortfalls.”