A survey of councils in England and Wales by the Local Government Information Unit (LGIU) thinktank has found some local authorities may be forced to declare technical insolvency in the next two years. The research found that three-quarters had little or no confidence in the sustainability of local government finances.
94 per cent of council leaders surveyed said they were planning to either raise council tax or increase charges in areas such as planning applications, car parking, removal of garden waste. Two thirds said they were using funding from their reserves in order to balance the books.
Jonathan Carr-West, the Chief Executive of the LGIU, said council finances were at breaking point: “Council budgets are stretched beyond measure. Increased demand coupled with the management of nearly a decade of cuts from the government has left local government at breaking point. Everyone is expecting someone to fail. They are just hoping it won’t be them.
“Councils have no faith in the system. They are patching together their finances by putting up council tax, drawing down reserves and increasing charges. Increasingly they worry that they will not be able to provide the vital services that people rely on.”
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