Councils are facing a record cash shortfall of more than £3.5bn in the coming year with jobs and services facing cuts, according to an analysis.
Data compiled by Unison, the trade union, found there were 114 councils in England, Scotland and Wales – almost a third – facing shortfalls of more than £10m. It said 15 councils were likely to be in the red by more than £40m next year.
Top of the list is Birmingham city council, with a £164m shortfall, followed by Thurrock council with a gap of £157m, both of which in effect recently declared themselves bankrupt.
Other authorities with severe cash shortfalls are Hampshire county council, on £82m, Sheffield city council, on £72.7m, and Bradford city council, on £72m.
Unison found the data from freedom of information requests as well as examining publicly available information. The research found that 86% had a predicted budget gap, with just 14% saying they were on course to balance the books.
It warned that the situation was likely to worsen as the cumulative funding gap is predicted to rise even further to more than £7bn in 2025/26.
The union said many local authorities were already considering job cuts as well as scaling back community services such as waste collection, libraries and leisure centres. Others may sell land and buildings or dip further into reserves.
Christina McAnea, the general secretary of Unison, said many councils were “on the brink”.
“Communities rely on their local authorities for all manner of essential services, such as waste collection, road repairs and parks and other open spaces,” she said.
“But councils are on their knees. Ministers seem to care very little about public services and local government has been hit hard over very many years.
“Essential services can’t run on thin air. Staff levels have already been cut to the bone in desperate attempts to balance the books.
“Yet more service cuts and job losses are sadly inevitable across the country unless the government intervenes with the lifeline of significant extra funding. Not just for those on the brink, but to councils everywhere.”
Unison highlighted Woking council, where 350 workers have been put on notice of possible redundancy as it seeks to cut 60 positions, and Kirklees council, which has plans to axe 250 jobs between October and next March.
Hampshire is reviewing its school crossing patrols, putting up to 45 jobs at risk, while Kent is considering the closure of 37 children’s and youth centres across the county.
Following the analysis, Unison called on Jeremy Hunt, the chancellor, to provide extra grant funding in the autumn statement to help with the immediate challenges, warning that local authorities and their communities would no longer be able to cope.
A spokesperson for the Department for Levelling Up, Housing and Communities, said: “Local authorities have seen an increase in core spending power of up to £5.1bn or 9.4% in cash terms on 2022-23, with almost £60bn available for local government in England.
“We stand ready to speak to any council that has concerns about its ability to manage its finances or faces pressures it has not planned for.”
The local government finance settlement for 2024-25 is set to be published later in the year.
