Local authorities have warned of “disastrous” emergency funding cuts to local services due to spiralling inflation and other pressures threatening their financial viability. Many councils have been forced to abandon their financial plans set just three months ago owing to the “unprecedented crisis”, with rising costs meaning many will struggle to meet their legal duty to balance the books this year.
New analysis by the Conservative-led Local Government Association (LGA) has found inflation alone will add £800 million in additional cost pressures on budgets in 2022-23. The combined impact of general inflation, energy costs and projected increases to the National Living Wage takes that total to £2.4 billion, increasing to an estimated £3.6 billion in 2024-25.
Calling on the Government to provide “adequate” long-term funding ahead its annual conference in Harrogate this week, the LGA warned there was a “serious risk to the future financial viability of some services and councils”. The LGA said the impact of inflation and energy prices could not have been predicted when the local government finance settlement was finalised by ministers earlier this year, and when councils set budgets in March.
