Following a survey by the Local Government Association, it has been found that nearly one in five councils are likely to have to issue a Section 114 notice.
This comes as the LGA estimates that a £4 billion funding gap is being faced by councils over the course of the next two years just so that services can remain standing, with no additional funding being committed by the government through November’s Autumn Statement. The lack of further support from the government came despite warnings from councils that their financial sustainability is under threat.
Also revealed through the survey of council leaders and chief executives was the fact that 50% are not confident they will be able to carry out their legal duties next year due to finances, as well as almost two-thirds of respondents stating that none of the announcements in the Autumn Statement will help their council’s financial position improve.
Councillor Shaun Davies, Chair of the Local Government Association, said:
“The lack of funding for local services in the Autumn Statement has left councils facing a growing financial crisis.
“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 county, with councils providing hundreds of services that our communities rely on every single day. For many people, these services are a lifeline.
“If councils cannot thrive then our communities cannot thrive. If social care services that councils provide cannot cope with demand, then pressure on the NHS will grow further. If council housing teams can’t succeed, then all of our hopes for new homes will not succeed.
“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.”
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