Local authorities have warned of “disastrous” emergency funding cuts to local services due to spiralling inflation and other pressures which are 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.
Rising demand for services at a time of dramatically escalating costs had created a “perfect storm”, undermining efforts by councils to address inequalities and support communities through the cost-of-living crisis, the LGA said.
The organisation’s Conservative chairman James Jamieson said the threat to essential services would compound the impact of falling living standards across communities.
He added: “Inflation is not going to come down overnight. As our analysis shows, the impact on our local services could be disastrous.
“This will stifle our economic recovery, entrench disadvantage, and undermine government ambitions to level up the country.”
Councillor Jamieson said only “adequate” long-term funding to cover costs and “the right powers” would enable councils to deliver vital services, tackle the climate emergency and level up communities across the country.
A Government spokesperson said: “This year, we made an additional £3.7 billion available to councils so they can continue delivering key services, and we are working with the sector to understand the impact of emerging challenges.
“As many families face cost-of-living challenges, the record increase in the national living wage will mean someone working full time taking home £5,400 more annually than they were in 2010, while our £37 billion package of financial support is helping the most vulnerable in society.“
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel