From austerity to prosperity: UNISON calls for rescue funding amidst local government funding crisis

In this article, Matt Egan, UNISON national officer for local government, highlights the urgent need for the UK government to end council budget cuts, and invest in services and staff.

As the largest local government union, UNISON has long been at the forefront of campaigning for extra funding for the UK’s hard-pressed councils. For several years, we’ve calculated and reported on the collective medium-term funding gap faced by councils across England, Wales and Scotland, in order to encourage the previous UK government to end austerity and increase support to the sector.

Our new report, Councils on the Brink includes new elements this year to make it even easier to assess the state of local government finances at a glance.

Once again, the study showed the soaring collective shortfall between what councils have and what they need to provide current services. The predicted gap now stands at £4.3bn for 2025/26, and cumulatively that’s likely to have reached a staggering £8.6bn by the following year. However, there’s an awareness that such large figures can sometimes appear a little abstract, so this year that was given additional context.

As well as asking councils to provide their raw funding-gap data through a series of freedom of information requests, the union also obtained their future net revenue budgets. This gives a much better indication of the scale of the financial challenge facing each authority. That’s because while some councils have gaps that in isolation appear high, when viewed as a proportion of their planned spending the true picture is clearer.

For example, Glasgow City Council’s predicted funding gap of £50m in 2025/26 amounts to 2.5% of its £1.9bn revenue budget for that year. It’s a lot of money for an upper-tier council and will certainly not be easy to find. But it can be seen in completely different light when compared with Rushmoor Borough Council’s predicted £4.1m funding gap in 2025/26. That equates to a giant 34.6% of its estimated net revenue budget of £11.9m. The report clearly emphasises how smaller district councils are in very challenging times.

Even after 14 years of austerity, it’s increasingly obvious that councils of every type – regardless of location, political control or size – are still confronting major spending and job cuts to balance the books. In UNISON’s view, that’s an unsustainable position for the local government sector.

Over the past year, the union has also conducted other research to highlight the consequences of diminishing funds on the services they provide. For instance, some 1,168 council-run children’s centres were shut down between 2010 and 2023 in England and Wales. There has also been a significant decline in the number of council-run libraries (1,376 fewer) and public toilets (a drop of 1,629) over the same period.

Such data has been combined with the analysis of council finances and can be viewed here on UNISON’s interactive map, allowing users to look at the problems facing individual councils and across regions.

The union’s data was launched on the same day prime minister Keir Starmer held a Number 10 summit aiming to tackle knife crime. There are of course many reasons for the grim growth in knife violence, but many experts agree the severe decline in council youth service provision is a significant factor. Between 2010 and 2023, at least 1,243 council-run youth centres were closed across England and Wales, effectively removing a key partner in stemming this sort of crime.

After this summer’s riots, stoked by far-right misinformation, Keir Starmer stated:

“Things will have to be done differently. We will do the hard work to root out 14 years of rot. Reverse a decade of decline. And fix the foundations.”

Repairing and reversing the damage done to local government since 2010 has to be central to the prime minister’s admirable aim. But as things stand, there’s the very real prospect of many more councils effectively declaring bankruptcy in the coming months, with all the associated cuts to jobs and services that will bring.

Come budget day on October 30, if there’s any hope of turning a corner, the chancellor must recognise the need to address the council funding crisis. And that means emergency grant funding.

To read more about local government funding across the UK, see LGIU’s annual English and Scottish finance reports and our lessons for English local government finance from overseas.