Cross-party committee also recommends overhaul of ‘outdated and regressive’ council tax
Ministers must urgently inject £4bn into English town hall budgets to head off an “out of control” financial crisis that threatens to drag well-run councils into bankruptcy and put local services at risk, a cross-party group of MPs has warned.
The levelling up, housing and communities committee said government must act now to help councils stricken by shrinking resources and the costs of rising demand for adult social care, child protection, homelessness and special educational needs provision.
Adult and children’s social care, which is consuming 70p of every £1 of top-tier council spending, forcing them to close or shrink nonstatutory services such as leisure, parks, recycling and economic development. The report highlights soaring bills charged by privately run children’s homes.
A £3.6bn deficit incurred by an explosion in plans catering for pupils’ special educational needs and disabilities. The deficit, allowed to continue off the books under a special “override” agreement with ministers, is due to be repaid in March 2025.
Rising homelessness, which has left councils struggling to source expensive temporary housing for families evicted as a result of freezes in local housing allowance. Although ministers plan to uplift the allowance for a year from April, the respite will be only temporary, the report says.
