Local services need £8 billion extra funding just to stand still, councils tell Rishi Sunak

Pressures on budget to mostly come from social care

Chancellor of the Exchequer Rishi Sunak. (PA Wire)

Councils are facing an £8 billion funding blackhole by 2024/25 just to keep local services running at today's levels, local government leaders have claimed.

An analysis by the Local Government Association says local authorities will face extra cost pressures, mostly related to social care, that will push their finances to the brink.

James Jamieson, the LGA's chair, called on chancellor Rishi Sunak to set out how much funding they would receive over the next few years so that they could plan ahead.

And he called for the creation of a £1 billion Community Investment Fund to prop up the parts of council budgets related to the government's so-called "levelling up" agenda.

“Councils continue to face severe funding and demand pressures that will stretch the local services our communities rely on to the limit," the top councillor said.

"Securing the long-term sustainability of local services must therefore be the top priority in the Spending Review."

He added: “If we are to come out of this pandemic with a society that is truly levelled up, the vital services that councils provide must be at the heart of it. Councils need certainty over their medium-term finances, adequate funding to tackle day-to-day pressures and long-term investment in people and transforming places across all parts of the country to turn levelling up from a political slogan to a reality that leads to real change for people’s lives."

Of the extra funding that needs to be found the LGA says £1.1 billion per year is related to adult social care, £0.6 billion to children’s social care and £0.9 billion to all other council services whose costs will increase.

Mr Sunak's autumn budget will be delivered on 27 October following a Treasury review of spending carried out over the coming month.

A government spokesperson said: “The government has allocated more than £12 billion directly to councils since the start of the pandemic - with more than £6 billion available to spend as they see fit - recognising that councils are best placed to deal with local issues.

“We have taken historic action to fix the social care crisis that governments have ducked for decades – the Health and Social Care Levy will raise £12bn a year to fund the NHS and social care.

“The Spending Review will continue to focus on supporting jobs and delivering the public’s key priorities.”