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One in five local authorities may lack sufficient resources

According to new data carried out by the Society of Local Authority Chief Executives (Solace), almost one in five local authority leaders predicts their council will officially lack sufficient resources by the end of the next financial year.

According to the research survey, which was run by Solace in conjunction with BBC Newsnight, 19% of local authority Chief Executives predicts their council will have to issue a Section 114 notice (s114) – a formal declaration that a council has insufficient resources to match its spending needs.

It is predicted those 19% of councils will be forced to issue s114 notices by the end of the next financial year.

A further 16% are expected to join them the following year if no further financial support was forthcoming from the Government.

Among upper tier councils – those who are responsible for delivering adult and children’s social care services – the figures painted an even bleaker picture, with more than a quarter of respondents (26%) to the Solace survey suggesting they would need to issue a notice by the end of 2021-22.

That figure was expected to increase by a further 17% the following year without further support.

Faced with the impacts of Covid-19, the research showed the average funding gap per local authority, which had been sitting at just under £4.2m pre-pandemic, had now quadrupled to £16.1m per local authority – a result of both increased costs and lower income from business rates, council tax and sales, fees and charges as a result of the pandemic.

In particular, upper tier councils saw the funding gap jump from £7m at the beginning of the year to now £25.6m per authority.

As part of the survey, Solace also asked Chief Executives from local authorities to highlight the services they expected to suffer most in terms of quality and level of provision in 2021-22.

For upper tier council Chief Executives, the three services predicted to be most heavily impacted were:

  • Adult social care (85%)
  • Roads and highways (71%)
  • Children’s social care (69%)

At district council level, the three services predicted to suffer the most in terms of quality and level of provision were:

  • Waste (61%)
  • Street cleaning (61%)
  • Housing (57%)

Martin Reeves, Solace spokesperson for Local Government Finance and Chief Executive of Coventry City Council, said: “As the financial pressures on councils grow day-by-day there has never been a more urgent need for the Government to provide councils with a truly sustainable financial settlement.

“While the additional support provided to date, including the extra £1bn announced this week, is welcome, the total package falls far short of Ministers’ promises at the beginning of the pandemic

to cover all councils’ costs. The result is that the funding gap across the local government sector is growing by the month, as the Institute for Fiscal Studies has shown.

“Local government has a vital role to play, not only responding to the Coronavirus emergency, but in building back better too, and in steering our communities and local economies through Britain’s departure from the European Union.

“But without the right financial support, councils will be unable to successfully fulfil those crucial roles and the nation’s recovery will be severely undermined.”

The Solace survey data results were based on responses from 132 serving Chief Executives of local authorities in England, surveyed throughout August and September.

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