Council emergency bailout deals are at risk of becoming ‘normalised’ as budget overspends continue to rise, the LGA has warned.
New LGA analysis ahead of next month’s Budget reveals that councils in England are at risk of substantial budget overspends in 2025/26 across adult social care, children’s social care, SEND home-to-school transport, and homelessness services.
Overspending in these demand-led services means councils are increasingly having to rely on emergency measures, such as in-year cuts to services and drawing on reserves, to balance the books.
Twenty-nine councils – including nearly one in six with social care duties – needed exceptional financial support from government this year, simply to keep essential services running. This is a substantial increase on last year and a warning sign of systemic failure, according to the LGA.
As part of its Autumn Budget submission to the Treasury, it is calling for the Chancellor to provide councils with a significant boost in resources to prevent widespread financial failure and empower councils to unleash growth and public service reform at scale.
Cllr Louise Gittins, LGA Chair, said councils “need a fair financial foundation to stand on”.
“Council costs and demand for services are soaring, leaving significant potential overspends this year,” she added.
“The consequences are visible everywhere: fewer neighbourhood services, reduced investment in prevention, and growing pressure on those who rely most on local support.
“When a system relies on emergency bailouts to function, it is fundamentally broken. If the Government is serious about growth, public service reform and opportunity for all, it must start with councils – because when councils succeed, the country succeeds.”