Councils in crisis

In the past six years, eight local authorities have filed for bankruptcy – whereas none had done so in the previous 18 years. One in five local authorities have expressed concerns about facing similar circumstances by 2030. 

As a result, council-funded construction projects face an uncertain future as a once-steady source of work for contractors comes under financial strain.

So sets the context for our next monthly news round-up, as we highlight some of the key media coverage our copywriter and editor Zoe Lamb-Jarman has come across throughout March.

In what was the last Spring Budget before a general election, chancellor Jeremy Hunt prompted frustration and disappointment from across the sector in what some have described as a ‘missed opportunity’.

Tracy Harrison, chief executive of the Northern Housing Consortium, said the chancellor’s commitment to support levelling up is a positive development but risks being undermined by a continued crisis in local government funding.

Discover the full story in Inside Housing.

Earlier this month, BBC Panorama published the results of its five-month investigation into Havering Council as it has struggled to balance its books and wrestled with decisions over which services to cut and which to protect.

Unsurprisingly, housing is a key pressure point as more families face homelessness and turn to the council for help. In the past year, Havering has housed more than 500 families in hotels: a costly situation that isn’t working for anyone.

Read the story here.

A dramatic rise in the number of renters in rural areas is putting pressure on English councils, prompting the largest ones to call for a new long-term plan for housing.

According to a report from the County Councils Network, the number of households in private and social rentals has increased by more than half a million in rural areas over the past decade, outpacing London and major cities.

See more here.

Perhaps one of the most publicised council failures in recent months has been Birmingham City Council - the largest local authority in Europe. It declared itself bankrupt and needs to make £300m in savings.

The city’s residents are feeling the full force of this. Birmingham's Labour council leader Mr Cotton blamed the government for causing wider financial issues at local council level.

Read more here.

During a grilling by MPs at the Commons liaison committee, Prime Minister Rishi Sunak rejected the idea that there is a crisis in council finances during a grilling by MPs at the Commons. Clive Betts, chair of the levelling up, housing, and communities committee, asked the prime minister to confirm that DLUHC was “forecast to have no increase at all in spending for the next parliament”. Mr Sunak responded: “All I can say is, the spending review has not been done.”

Read more on LGC Plus.

The Local Government Association estimates councils in England may be facing a funding gap of £4 billion over the next two years. As councils and local authorities await the announcement of a general election with bated breath, it remains to be seen whether they will get the support they are desperately hoping for.