Councils risk going bust over £2.4bn budget cuts

Councils will soon be forced to make "disastrous" cuts to essential services including adult social care, road repairs and bin collections as soaring costs push some local authorities towards bankruptcy, a report has warned.

- BEN CHAPMAN

The Local Government Association (LGA) said problems are so acute that some councils may soon go bust, leaving older people without vital support and children facing greater risks of exploitation. Council budgets are already at breaking point after a decade of austerity that has seen central government funding slashed and local services cut to the bone.

Authorities face a further £2.4bn hit to their budgets this year from huge jumps in energy bills alongside higher wage costs and a rise in prices for a host of essential goods. By 2024-25, the impact will have risen to £3.6bn, the LGA estimates.

Problems are likely to be so bad that some will have to follow in the footsteps of Croydon Council which was last year effectively declared bankrupt. Cost increases "pose a serious risk to the future financial viability" of some councils, the LGA said. Councils say that their ability to provide families with safe and secure accommodation and tackle rough sleeping will be "significantly impacted", while planning applications are taking much longer to process.