Council tax and charges are set to be hiked by nearly all English local authorities as a vast majority fear for their financial stability, a survey suggests.
Nearly all councils (95%) plan to increase council tax while 93% will hike charges to make ends meet, the 2018 State of Local Government Finance research conducted by the LGiU think tank and The Municipal Journal found.
The planned increases come against a backdrop in which 80% of councils fear for their financial stability.
Council tax can be hiked by up to 3% this year, in line with inflation, before a referendum is triggered, while authorities can also levy an additional “precept” to raise money for spending on social care.
The greatest immediate pressure on budgets came in children’s services (nearly 32% of councils), followed by adult social care (nearly 28%), and housing and homelessness (19%).
Adult social care was the greatest long-term pressure (nearly 38%), the survey said.
Surrey, Britain’s richest county, is among the worst hit in the country and Bureau of Investigative Journalism documents warn its county council faces a £105m funding gap, the equivalent to a 12.8% increase.
A Surrey County Council spokesman said: “We’ve agreed a three-year budget despite the severe financial pressure we – and councils across the country – are under due to rising demand for our services and falling government funding.
“We’ve been successfully managing the growing need for adult social care, children’s and other key services partly through making savings of £540m since 2010 and have made sure we keep within our overall budget.”
Jonathan Carr-West, chief executive of LGiU, said the figures offered few surprises.
He said: “Councils are on the edge. They are for the most part holding services together (though a significant minority are not). But they can only do this this by raising council tax, increasing charging and draining their reserves.
“The system is unsustainable and needs far more fundamental reform than is presently on offer. It’s simply not acceptable that we don’t know how local government will work post 2020.
“Councils are calling for assurances around funding for the next three years and for a fundamental redesign of the finance system. At present government is offering neither. That has to change.”
Responding, Local Government Association chairman Lord Porter said: “Some councils continue to be pushed perilously close to the financial edge.
“Many will have to make tough decisions about which services have to be scaled back or stopped altogether to plug funding gaps.
“Extra council tax raising powers will helpfully give some councils the option to raise some extra income but will not bring in enough to completely ease the financial pressure they face.
“This means many councils face having to ask residents to pay more council tax while offering fewer services as a result.
“The LGA has warned about the urgent need to address the £2 billion funding gap facing children’s services.
“A child is being referred to council children’s services every 49 seconds on a daily basis and councils started more than 500 child protection investigations every day last year – up from 200 a decade ago.
“This unprecedented surge in demand shows no sign of abating.”
– A total of 113 individual councils responded to the survey, representing a third of all English local authorities.
A spokesman for the Ministry of Housing, Communities and Local Government said: “Our finance settlement strikes a balance between relieving growing pressure on local government whilst ensuring that hard-pressed taxpayers do not face excessive bills.
“We have listened to representations made from councils and delivered on these with extra funding.
“Overall councils will see a real-term increase in resources over the next two years, more freedom and fairness and with a greater certainty to plan and secure value for money.
“We are also delivering on our commitment to give councils more control over the business rates they raise locally – with millions of pounds staying in communities and being spent on local priorities.
“We want to work with local government to develop a new funding system for the future and encourage councils to submit responses to the review currently under way.”