Council funding gap of £3.5bn is set to rise to more than £7bn by 2025, union research suggests

Local councils in England, Scotland and Wales "are teetering on the brink" as they face a combined funding gap of £3.5 billion, new research has shown.

In a new research report, public services union UNISON also warned that the financial situation for councils is set to worsen, with the gap in funding set to top £7 billion by 2025.

The research report, titled Councils Under Pressure, shows 114 councils (31%) are at least £10m short of their planned spending requirements, while 15 (4%) are as much as £40m adrift.

The research also revealed that the vast majority (86%) have a predicted budget gap, with just 52 (14%) saying they are on course to balance the books.

Authorities with severe cash shortfalls include Hampshire County Council, which is short some £82m, Sheffield City Council, which is short £72.7m, and Bradford City Council, which has £72m less than it needs, according to the research.

Last week (29 September), the leader of the London Borough of Havering, Cllr Ray Morgon, warned of difficult and painful decisions to come" at the council due to a potential gap of £14 million, rising to £51.8m over the next four years.

As a result of the shortfalls, all councils "are likely to have to make cuts to services and their workforces," UNISON said.

UNISON's findings were based on data from 369 local councils across Britain.

The union highlighted redundancies in its research, noting that Woking, which issued a section 114 notice in June this year, has put 350 workers on notice of redundancy.

It also noted that Kirklees Council has plans to axe 250 jobs over the next six months and that Kent County Council is mulling the closure of 37 children's and youth centres.

The union called on the Chancellor of the Exchequer, Jeremy Hunt, to provide extra grant funding in the upcoming Autumn Statement to help councils weather the immediate challenges.

It also said work must be done "at pace" on reforming how councils are funded to tackle the huge reduction in central government resources since 2010.

UNISON general secretary Christina McAnea said councils "are on their knees".

She added: "Ministers seem to care very little about public services and local government has been hit hard over very many years.

"Essential services can't run on thin air. Staff levels have already been cut to the bone in desperate attempts to balance the books.

"Yet more service cuts and job losses are sadly inevitable across the country unless the government intervenes with the lifeline of significant extra funding. Not just for those on the brink, but to councils everywhere."

Adam Carey