UK councils slashing services to meet £3.2bn budget shortfall

Libraries and children’s centres are closing and home pick-ups for young disabled people being cancelled as councils try to meet a £3.2bn budget shortfall next year.

Rowena Mason 

With inflation and energy prices eating into budgets, local authorities across the UK are facing a record black hole that is unlikely to be plugged by central governmentas the Treasury is seeking to squeeze spending to make up for a £30-50bn shortfall in the public finances.

The trade union Unison collected data from 391 councils, compiled through freedom of information requests and financial statements, and found that almost nine in 10 have a predicted budget gap in the 2023/24 financial year.

Unison said its data shows the biggest budget shortfall of £80m next year is being faced by Birmingham city council, which lists Liz Truss’s mini-budget as one of the contributing factors in its worsening finances.

In the last few days, the numbers have worsened in several major council areas. Edinburgh council reported this week it is also facing a £80m black hole, up from £70m last month, with the Labour local leader warning of “probably the worst cuts I’ve seen in my time in this council”.

Kent county council said it was increasing its projected overspend to £70m, up from £50m just three months ago, with its Conservative council leader telling colleagues: “We’ve never been looking at a projected set of pressures on this scale; no one should doubt the gravity of the situation.” It said not a single department would be immune from cuts.

In Lancashire, the council said this week that its project shortfall has almost trebled, from £30.5m to £87m – even bigger than Birmingham. It is looking at cost-cutting measures on everything from cutting the grass less often to spending less on children’s home placements.

Unison’s investigation found that waste collections, leisure centres, nurseries and other vital services are already being cut in some local authorities in England, Scotland and Wales as they prepare for a tough year ahead. The data suggested the cumulative funding gap is to worsen to more than £5.28bn in 2024/25.

Some of the current and impending cuts include:

– Wirral Council shutting nine libraries by the end of this month, with two being handed to community and church groups

– Gateshead Council looking at closing two leisures centres deemed “unaffordable” as it grapples with a £6.5m shortfall

– Leeds city council cancelling Bonfire Night events in six locations next month to save £200,000 of non-essential spending at a time of budget pressures

– Hillingdon council, covering Boris Johnson’s constituency, planning to close all three of its nurseries, which provide more than 100 childcare places across the borough

– Hampshire County Council planning to scrap a transport scheme that take thousands of disabled children to school to save £1m. Home pick-ups would be replaced with drop-off points

– Norfolk county council planning to reduce access to recycling centres by closing them on Wednesdays, with its Tory council leader warning he had never dealt with funding reductions on this scale, to plug a £60m gap

The Local Government Association has warned Jeremy Hunt in a letter that the £3bn-plus shortfall facing councils will lead to cuts, particularly as inflation has worsened since the last local government finance settlement was announced. “Without immediate additional funding, councils will face increasingly stark decisions about which services to stop providing as rising costs hit budgets. This means not just isolated closures of individual facilities but significant cuts to services people rely on, including those to the most vulnerable in our society,” it said.

On Thursday, the Welsh Local Government Association (WLGA) also said its councils were facing pressures “on a scale never seen”, with “painful cuts” to come.

Christina McAnea, the general secretary of Unison, which represents 600,000 local government workers, said: “Cash-strapped councils are having to resort to ever more desperate measures after years of austerity just to keep services going. Now the government looks set to make their predicament infinitely worse with emergency cuts to spending after the mini-budget fiasco.

“Local communities cannot be the ones to pay the price for the government’s grotesque mismanagement of the economy. The new prime minister and chancellor ​must sort the crisis in local government funding, and give councils the cash they need to save services.”

Asked about the £80m shortfall at Birmingham, which is the biggest local authority, council leader Ian Ward said: “Like councils across the country, we are currently working up budget proposals for 2023/24 and everything possible will be done to safeguard the vital services that people across Birmingham rely on.

“As the Local Government Association has made clear, soaring inflation, energy prices and ‘National Living Wage’ pressures are putting council services at risk, while the cost of living crisis, made worse by the Tories crashing our economy, means increased demand for support and services.

“This is a perfect storm for local government and without government action, councils will have no choice but to significantly cut local services. So, if the government is truly committed to levelling up, then the chancellor’s autumn statement on 17 November must not signal a return to austerity.”

A government spokesperson said further details of spending will be set out in the autumn statement in November.

“We recognise councils may be concerned about their budgets in the face of the difficult economic times we are in and we continue to work very closely with them to understand the impact inflation may have,” the spokesperson said.

“This year alone we have made an additional £3.7bn available to ensure councils have the resources they need to deliver vital public services.”