New research had revealed that county councils in England will need to make at least £1bn of savings to balance their 2023/24 budgets due to “unprecedented” financial pressures.
The data by the County Councils Network (CCN) and the Society of County Treasurers found that despite the majority of authorities hiking up council tax from April and reducing services, £1bn of savings, as well as £350m of reserves, will be needed to balance their budgets.
It also revealed that inflation is set to add £1.6bn to county councils’ budgets next year and comes after high prices last year increased authorities’ costs by £1.41bn.
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Carl Les, the CCN finance spokesperson, said: “This analysis shows the scale of the financial challenges facing county authorities to remain solvent, with councils having little option to raise council tax.
“We understand that residents are in the midst of a cost-of-living crisis, and many of us have reluctantly proposed maximum council tax rises.
But even this is not enough, with councils in county areas having to make a further £1bn worth of savings and use ‘rainy day’ reserves just to balance the books.”
The CCN has called on the government to recognise the higher cost of delivering services in the Local Government Finance Settlement later this year, while also setting out its plan to reform the council funding system in the medium term.
Les added: “The medium-term outlook looks bleak unless these higher costs are recognised and councils are given longer-term financial certainty, alongside delivering long-promised fair funding reforms.”
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