A network of councils in England is warning support services for families hit hardest by the cost of living crisis face being axed amid an unexpected £400m bill caused by soaring inflation.
Services that district councils have no legal obligation to provide – such as debt and benefits advice, hardship funds for families, homelessness prevention projects and help hubs for people facing poverty – are under threat.
Other discretionary services, including the running of leisure centres and swimming pools, parks, museums and theatres, also face closure or reduced opening hours as rising energy and wage costs force them to pare back services to a legal minimum, the District Councils’ Network (DCN) said.
One district chief executive told a DCN survey that in the medium term they would “need to review what, if any, discretionary services we can continue to deliver”.
High-profile projects such as town centre regeneration programmes and coastal defence schemes are also at risk because soaring construction costs – in some cases rising by as much as 40% in a matter of months – have made them unviable.
The DCN, representing 186 lower-tier councils outside England’s big cities and urban areas, the majority of which are Conservative-run, said without government help inflationary pressures and rising demand for services would push district councils’ shortfall to £900m next year.
One council told the Guardian its budget for this year, agreed in February, had been wrecked by soaring inflation. Fuel bills for its fleet of refuse trucks had risen by £500,000, while the cost of heating its swimming pools had increased by £750,000. Its staff wage bill had been expected to go up 2.5% but rose instead by 7%.
Districts are also anticipating an explosion in demand for temporary accommodation from people made homeless as a result of rising rents, evictions and repossessions.
Districts, often relatively small and close to their communities, run frontline services used and noticed by almost the majority of residents such as refuse collection, housing, parking, leisure centres and parks, public toilets, planning and council tax collection. They serve about 40% of England’s population.
After years of cuts to their funding from central government, many districts have become financially dependent on a blend of council tax and income from fees and charges levied on assets such as car parks and leisure centres. These sources of income dipped during Covid and have in many cases struggled to recover.
Sharon Taylor, the DCN’s vice-chair and finance spokesperson and the Labour leader of Stevenage district council, said: “District councils face a perfect storm. Inflation and pay pressures are driving up our costs just as the cost of living crisis bites for our residents and fuels demand for our services. We desperately don’t want to cut back on leisure services or welfare support. But the risk is that something will have to give.”
The Local Government Association warned in the summer that some councils could be pushed into bankruptcy by spiralling inflation. The government has given no indication it will step in to support council funding in the way it did during Covid.
A government spokesperson said: “We have made an additional £3.7bn available to councils this year and stand ready to speak to any that have concerns about balancing their budgets. We are also providing a discount on energy prices this winter for councils whose bills have been significantly inflated by the global energy crisis.”
