Vulnerable hit hardest as councils face £4bn shortfall, Unison says

Councils face a funding shortfall of more than £4 billion next year, putting more strain on overstretched services, according to a report.

Unison said its research found that the most vulnerable residents were paying the price for years of underfunding. 

The union said figures compiled with information directly from local authorities in England, Wales and Scotland showed council finances remained in a “dire state” despite a cash injection following Labour’s election victory last year.

Unison estimated that the shortfall, between what councils need to run services and what they receive, amounts to £4.1 billion in 2026/27.

The figure would have been far higher but for intervention from the Westminster Government through the local government finance settlement earlier this year, said Unison.

After more than a decade of austerity, councils are being forced to take increasingly drastic steps to balance their books, said the report.

Rising inflation and energy costs, plus the growing demand for adult and children’s social care, are pushing fragile council budgets to breaking point, said Unison.

General secretary Christina McAnea said: “Councils are still billions short of the money they need to provide essential services.

“Local authorities are being forced to make cuts that often hit the most vulnerable hardest. 

“After 15 years of ruthless austerity, no community has been left untouched.

“Frontline staff are exhausted, services overstretched, and thousands of jobs are under threat.

“Investment in councils, their communities and workers is urgently needed.

“This includes multi-year funding settlements so local authorities can plan more effectively and deliver services without the constant fear of collapse.

“Action is also needed to protect jobs, wages and employment terms threatened by council reorganisation.”

In total, 157 of the 370 councils contacted provided their funding gap figures directly.

Others pointed Unison to their medium-term financial plans, or to budget-setting papers.

For these councils, data was manually gathered by the union.