Over half of English councils face insolvency under £5bn deficit, MPs warn
Councils in England face being overwhelmed by billions of pounds in debts and reforms that are divorced from reality, according to an influential committee of MPs.In its inquiry into local government finances, the public accounts committee (PAC) told the Treasury and other departments to urgently address the estimated £5bn deficit on high needs spending – mainly on special educational needs – that will hit council balance sheets at the end of the financial year, potentially driving many insolvent.Sir Geoffrey Clifton-Brown, the PAC’s chair, said: “Our inquiry heard that the government is concerned about local authority finances.But the lack of urgent action to come forward with a plan to address the fast-approaching cliff edge for under-pressure authorities would seem to suggest it is comfortable with the current state of affairs as normalised background noise.“Alarmingly, scrutiny of council finances can now provoke a sense of deja vu, with the same unfixed issues seen over and over.
”Since 2021 councils have been able to keep high needs deficits off their balance sheets through a “statutory override” granted by the previous government.But the accounting manoeuvre expires in March 2026, the end of the current financial year.The inquiry said that the Ministry of Housing, Communities and Local Government, the Treasury and the Department for Education “should work together to set out their solution for ensuring local authorities can achieve a sustainable financial position when the statutory override ends in March 2026.The solution must include how cumulative deficits will be treated.”Louise Gittins, chair of the Local Government Association, which represents councils, said: “We expect the government to provide urgent clarity on how it plans to address high needs deficits, which are projected to rise to £5bn next year, as part of its forthcoming special educational needs and disabilities reforms.
“Over half of councils have warned us they will become insolvent next year when the statutory override flexibility ends and we continue to urge the government to write off these deficits.”The committee also accused the government of creating “significant uncertainty” over a string of promised reforms and reorganisations, including for funding, special needs provision and social care.Clifton-Brown said: “Aspirations for wide-ranging reforms seem to be unengaged with a reality in which local authorities do not have good and strong capacity to fundamentally change the way they work.”But Jim McMahon, minister of state for local government, said: “These claims are not supported by the evidence.From a standing start we have set out a clear plan to fix the foundations of local government and have wasted no time in taking action as part of our plan for change.
Sign up to Headlines UKGet the day’s headlines and highlights emailed direct to you every morningafter newsletter promotion“We’ve taken action to restore the audit system to a functioning state, recast our approach to council best value and we are laying legislation to bring in a new local audit office.“The spending review provided over £5bn of new grant funding for local services, and that’s on top of the £69bn we have already injected this year to boost council finances.”Last week the Guardian reported that council leaders in England say the multibillion pound high needs deficits have become a “burning platform” that will push scores of councils into bankruptcy within months.Ministers aim to publish a schools white paper in the autumn, including reforms to education, health and care plans, known as EHCPs.The plans give children and young people up to the age of 25 the legal right to support from local authorities’ high needs budgets, for conditions such as autism spectrum disorder, attention deficit hyperactivity disorder, and speech, language and communication needs.
Royal Ascot 2025 day two: Ombudsman rules in Prince of Wales’s Stakes – as it happened
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Four leading British basketball clubs blocked from Europe as civil war deepens
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All eyes now turn to Sydney and the Game 3 decider on Wednesday 9th of July. I will be back there to see who lifts the State of Origin shield. Until then, I’ll leave you with Jack Snape’s match report from tonight’s chaotic classic. Catch you soon.A quick look at social media and it appears NSW fans have some polite concerns with the refereeing of Ashley Klein
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They had been all but written off, rudderless and adrift with a rattled coach at the helm, but a spirited Queensland kept the State of Origin shield alive after a wet, wild and often bizarre Game 2 victory over New South Wales in Perth.The memorable 26-24 triumph wasn’t certain until the final moments after a titanic Blues comeback – highlighted by a Brian To’o hat-trick – brought them back to within two points with eight minutes to go.Yet the Maroons’ heroic defence in the dying stages was capped off by new Maroons captain Cameron Munster and recalled backrower Kurt Capewell, having faced repeat sets, who forced an error from Blues prop Payne Haas with another gritty tackle.The Blues’ final set ended in an error from fullback Dylan Edwards, securing one of the great Origin victories and triggering a mix of relief and celebration for the weary Queenslanders.The Maroons had scored four tries to five for the Blues
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Over half of English councils face insolvency under £5bn deficit, MPs warn