LONDON, 29 Jan: English local authorities face mounting financial pressures as years of austerity cuts collide with rising demand and costs across key services like social care, child protection and homelessness support.
Four councils have effectively gone bankrupt in the past year while one in five believe insolvency is likely in the next 18 months. Experts identify four key areas driving this crisis:
Children’s Services
Over a decade, looked after children have risen from 68,000 to 83,800. Covid and the cost of living crisis have further increased child protection referrals and demand for family support.
Rising numbers of expensive private children’s homes and care placements have stretched budgets to breaking point. Early intervention services like parenting classes that avert crises have declined due to squeezed resources.
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Adult Social Care
Council funding lags behind surging needs of an ageing population with complex conditions. Eligibility tightening and care access delays amidst workforce shortages, providers quitting the market, and soaring care costs.
Homelessness
House prices, rents, benefit cuts and social housing shortages have created a perfect storm even for smaller councils. Many face overspends of millions as temporary accommodation demand balloons.
Special Educational Needs
Reforms doubled eligible children but councils must fund often long-distance transport to schools. Accumulated deficits nearing £3.6bn will have to be repaid by 2026. Lack of places, individual taxis and fuel costs drive massive overspends.
After years of austerity cuts, experts warn failure to tackle these mounting pressures risks council insolvencies across England.
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