Labour must set out plan to stop councils going bust, MPs warn

Councils in England face being overwhelmed by billions of pounds in debts and by policy changes that are divorced from reality, according to an influential committee of MPs.

- Richard Adams

In its inquiry into local government finances, the public accounts committee (PAC) told the Treasury and other departments to urgently address the estimated £5bn deficit on high-needs spending – mainly on special educational needs – that will hit council balance sheets at the end of the financial year, potentially driving many into insolvency.

Sir Geoffrey Clifton-Brown, the PAC's chair, said: "Our inquiry heard that the government is concerned about local authority finances. But the lack of urgent action to come forward with a plan to address the fast-approaching cliff edge for under-pressure authorities would seem to suggest it is comfortable with the current state of affairs as normalised background noise.