The LGA has warned that growing cost and demand pressures continue to push councils in England to the financial brink.
Ahead of the Spring Statement in early March, the LGA wrote to Chancellor Rachel Reeves expressing real concern over the sector’s capacity to cope over the coming years.
It said it is good that councils have received some funding growth in recent years, plus a much-needed multi-year funding settlement that has improved councils’ financial certainty.
But the ongoing pressure on local government finances is illustrated by the recent announcement that 35 councils have been granted exceptional financial support for 2026/27.
LGA analysis shows that, while councils’ cash-terms spending on services grew from £45.3 billion in 2010/11 to £68.7 billion by 2024/25, had it moved in line with inflation, wage growth and demographic and demand drivers in this period, it would have reached £96.7 billion by 2024/25 – 41 per cent higher than actual net service spend in that year.
This means that councils made £27.9 billion worth of savings and efficiencies to their net service spending from 2010/11 to 2024/25.
Cllr Louise Gittins, LGA Chair, said: “Councils have delivered billions of pounds worth of savings, while still delivering vital statutory services upon which residents rely and working hard to provide the place-making services that make communities. But councils cannot keep absorbing rising costs and demand without real consequences.
“The current situation in which an ever-growing number of councils are reliant on selling local assets or building up debt from borrowing to fund vital local services – often for the most vulnerable in society – is not sustainable.”