The National Audit Office has reported that nearly half of English councils are facing potential bankruptcy due to a significant £4.6bn deficit resulting from outdated Conservative policies. Key issues include rising costs in public services, particularly related to special educational needs and disabilities (Send), which have not been adequately addressed. Although funding has increased, it has not kept pace with the growing complexities of needs across local authorities. Without timely reform by March 2026, a worrying 43% of councils may declare bankruptcy, following years of austerity measures that saw severe cuts to discretionary services.
Almost half of councils in England risk bankruptcy due to a £4.6bn deficit, necessitating urgent reform of funding for local government and services.
The National Audit Office warns of unsustainable financial conditions among councils, attributing this to rising public service demands and delays in reforming local government funding.
Funding from central government, council tax, and business rates rose by 4%, but funding per person fell by 1%. This shift demands immediate attention.
If the financial challenges are not addressed by March 2026, 43% of councils may face bankruptcy, exacerbated by inadequate funding for SEND services.
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