Councils across the East Midlands have a collective hole in their finances amounting to £349m for the coming financial year, says UNISON research published today (Tuesday).
New figures, based on information from local authorities across the East Midlands, show council funding is in a dire state with massive cuts likely to essential services and jobs, says the union.
The national report, Councils on the Brink, warns that failure to rectify the growing problem soon risks ‘the widespread collapse of local government’.
Local authorities in the East Midlands could be forced to sell land, buildings and other capital assets, as well as cut back vital community services like rubbish collection and recycling, libraries, public toilets and leisure centres even further, UNISON warns.
According to UNISON’s research, the councils across the East Midlands with the biggest predicted shortfalls for 2025/26 are Leicester City Council (£90.4m), Nottingham City Council (£68.7m), Leicestershire County Council (£33m) and Derbyshire County Council (£17.3m).
The funding gap measures the difference between each council’s income and the amount needed to maintain promised service levels. But as the shortfall grows between the cash local authorities need and what they actually have to spend, crucial services and jobs are being slashed.
The challenging financial situation is already having a potentially catastrophic and far-reaching effect upon the East Midlands, says UNISON.
For example, Leicester City Council launched a consultation earlier this year, warning it needs to save around £2m from its Early Help because of the shortfall in government funding. The council has also consulted parents on proposed cuts that would end funding for school transport for young people aged 16 and over with special educational needs and disabilities (SEND).
Nottingham City Council issued a section 114 notice in November last year, effectively declaring itself bankrupt. Since then, the council has cut more than 500 jobs and drastically scaled back local services. The city council plans to close four public libraries, has shut down a local activity centre, and stopped financial support for arts organisations as part of its cuts programme.
Derbyshire County Council has closed ten early intervention centres. It has also threatened to close up to eleven older people’s care homes and eight adult day centres. The county is also considering ending respite care for children with learning disabilities and, by March 2025, pulling the plug on all discretionary funding for community services and projects.
Without urgent government support, the union is warning that the combined funding shortfall across England, Scotland and Wales could balloon to £8.5bn by 2026/27, leaving many councils struggling to provide essential local services and protect jobs.
UNISON’s figures, based on freedom of information requests and councils’ own financial forecasts, paint a far bleaker picture than other estimates.
In England alone, the gap is expected to reach £3.4bn by 2025/26, significantly surpassing the £2.3bn projection published by the Local Government Association for English councils in June.
Years of austerity mean services have already been cut substantially, with widespread job losses and a reduction in vital support for some of the UK’s most deprived areas, says UNISON.
Many local authorities are now on the brink of financial collapse and the union says this new data suggests many more could soon follow suit.
Since 2018, eight councils – including Birmingham, Croydon and Thurrock – have issued section 114 notices, meaning they risk failing to meet the legal requirement to balance their books.
UNISON’s data also reveals the local authorities facing the biggest predicted funding gaps relative to their annual budgets. While unitary or county councils delivering vital adult care and children’s services remain under enormous pressure, the huge financial strain on many districts is even more apparent when measured this way.
At Leicester City Council, the estimated £90.4m funding gap for 2025/26 represents almost 20% of its £462.3m annual revenue budget.
UNISON East Midlands regional secretary Chris Jenkinson said: “Councils are teetering on the brink of financial disaster. Countless essential services and very many vital jobs are at risk, with terrible consequences for communities across the East Midlands.
“After 14 years of ruthless austerity, the very fabric of local society is under threat. Councils are quite simply the linchpin of local areas, so when services go, many people are left vulnerable, with no one to pick up the pieces.
“Local authorities were clobbered by the previous government, whose harsh financial settlements left councils with no option but to sell off the family silver, auction off green spaces, close key community facilities and let thousands of workers go. Only swift and decisive action to stabilise local finances will do.
“Labour has inherited a mess, with essential services battered and bruised. The new government in Westminster understands the value of healthy public services and the role they can play in generating economic growth, in a way its predecessors simply didn’t. So as tough as the financial situation may be, ministers cannot ignore the terrible plight of authorities of every political persuasion.
“There’s an unquestionable need to turn the page on the destructive cuts of the past and invest in services and staff to help councils rebuild Britain.”
