This includes Surrey, faced with a huge SEND bill and a £2.2bn shortfall in 2026-27.
Tim Oliver (Con), Surrey’s Leader and Chair of CCN, warned:
“England’s largest councils head into the Spending and Fair Funding Reviews today under considerable pressure and a huge cloud of uncertainty.
The County Council’s network has warned the Government that it is a ‘make or break’ time without further funding for local authority budgets.
With councils already facing a £2.2bn funding gap – alongside billions in SEND (Children’s Special Education Needs) deficits – local authority chiefs fear that any further reductions in funding could cripple local services and trigger a wave of councils applying for exceptional financial support to avoid declaring bankruptcy.
In a survey of 38 county and rural unitary councils by the County Councils Network (CCN) and the Society of County Treasurers (SCT), which sets out the stark financial challenges facing England’s largest councils, 60% of councils say they’re “not confident” of setting a balanced budget without new funding.
The survey reveals that cost pressures will not ease in county and rural areas, with surging demand and higher costs creating a further £2.2 billion funding gap next year, which will have to be filled by additional government funding, council tax rises, or service cuts.
This revenue budget gap comes on top of an estimated £2.7 billion in special educational needs (SEND) deficits, which are due to hit council budgets next March when a statutory accounting override comes to an end.
And CCN says the situation could be made worse if the chancellor doesn’t make more funds available, with councils in rural areas potentially facing a “double whammy”.
That’s because the government plans to permanently change the funding allocations of councils, with the ‘review of relative needs and resources’ – due to conclude later this year – potentially redistributing hundreds of millions of pounds towards urban councils.
With rural councils losing over £100m in dedicated funding last year, county and unitary councils say a multi-billion injection of resources is needed to ensure that these councils don’t lose even more funding as part of reforms to be introduced next year, which would exacerbate their financial pressures.
Tim Oliver (Con), chair of CCN, said:
“The chancellor’s decisions will make or break the budgets of county and rural unitary councils – in a year where we’re already making unprecedented savings and face a further £2.2bn shortfall in 2026-27.
“It’s almost unthinkable to imagine the situation getting worse, but a real-term cut in the Spending Review for the Ministry of Housing, Communities and Local Government’s Budget would be just that. For county and rural councils, it could be a double whammy, with any unfair changes to funding distribution leading to further reductions in their income.”
“With so much uncertainty as to what the chancellor will do, it’s no wonder six in ten county and unitary councils aren’t confident of setting a balanced budget next year. Funding reductions would undoubtedly worsen the situation for these authorities, leading to further service cuts and increased applications for exceptional financial support.
“It’s therefore essential that county and unitary councils receive a significant increase in funding and long-term financial certainty in the Spending Review and Review of Relative Needs and Resources.”
Which is why I have been highlighting a North South split.
From a Treasury perspective the North of the County van generate enough income to just about float. Everything else is if no great importance. If you want to live in the rural areas don’t expect services until you become a suburb and eventually you might get a street light.
Number of voters equals tax and political clout. More people in the North than the South and that’s how the gin swigging Surrey Hills have liked it forever. Now they pay the price.
SEND us a disgrace and a tragedy for families. There again, so is elderly care, mental health, housing.
The basics.
If you run a museum, community hub library, open space: start looking for another job. Grants are going to be like hens teeth.
Transport, the budget has been diverted to a hopelessly ridiculous rural system of dial a bus at massive expense that has created hardship. The Govt is the only reason most service run anywhere in the County. The Treasury is holding the strings.
Business
Paying for absolutely everything and hounded by pettiness to the point of shutting up shop. A new Unitary Authority isn’t going to make much difference to keeping afloat. Take the SCC Farnham Infrastructure Project as a shining example of chaos and loss. Then there is Brightwells. A whole TV series there methinks. I shall be contacting Netflix shortly.
The UK isn’t broke.
There is plenty of money. It’s just those that have it won’t spend it or pay it in taxes.
And of course Reform is paid for by those that would like to divert attention from those facts
History is repeating itself. The cancelling of the County election will have serious consequences far beyond it’s borders.
MM