Almost a fifth of councils lack confidence that they will realise all of the savings identified in their 2019/20 budgets, according to a survey by the Local Government Association (LGA).
This week, Room 151 reports total revenue spending on services by all English local authorities is budgeted to rise in 2019/20.
However, this figure disguises cuts in some service areas that councils are making to achieve a balanced budget.
A statement by the LGA on the finding of its survey said: “An unprecedented rise in demand means many councils are having to spend more than they planned for in adult social care, children’s services and homelessness support.
“These overspends have seen councils forced to make in-year budget cuts to try and balance their books.”
Last week, Room 151 revealed that Peterborough City Council is already predicting a £5.5m overspend on its 2019/20 budget – just one month into the financial year.
The survey also found that one in three councils fear that they will run out of money to provide statutory services within three years.
That number rises to almost two thirds of councils by 2024/2025 or later.
Lord Porter, LGA chairman, said: “As this survey shows, if the government fails to adequately fund local government there is a real risk to the future financial viability of some services and councils.
“Councils would normally have started their budget-setting planning process but remain completely in the dark about how much funding they will have next year.”
Responding to the report, Nick Rushton, County Councils Network finance spokesman and leader of Leicestershire County Council, said: “Today’s research is another stark example of the challenges facing local government over the coming years, and the impact of the uncertainty surrounding the Spending Review.
“It follows on from the County Councils Network’s own independent research by PwC, which showed that all councils face severe funding challenges over the next six years – with county authorities closer than most to the financial cliff edge, with many moving towards providing a statutory ‘core offer’.”
Rushton said that councils need immediate financial certainty from the incoming prime minister.
He said: “If a full three-year Spending Review is unable to be delivered owing to Brexit uncertainty, county leaders have been calling for an emergency injection of funding for local authorities next year, alongside a commitment to publish the outcome of the fair funding review.”
A separate survey released by the Chartered Institute of Public Finance and Accountancy released at the LGA conference found that 78% of local authority chief finance officers are less confident in their financial position for 2020/21 than they were in 2018/19.
The survey also showed the area of greatest pressure for top tier authorities remains children’s social care, with the number of authorities rating it the most high pressure area rising by six percentage points since the last survey in 2017.
CIPFA chief executive Rob Whiteman said: “Local government is facing greater demand pressures than ever before, with particular pressures in adults’ and children’s social care and housing.
“Local authorities also lack certainty about their future financial positions, so it’s unsurprising to see confidence on the decline.
“We have repeatedly pointed out that local government is in need of a sustainable funding solution, but meeting this demand requires more than pennies and pounds.”
