Six in ten county and rural authorities not confident of setting balanced budget: CCN

It is "essential" that county and rural unitary authorities receive a significant funding boost in the forthcoming Spending Review after survey results showed six in ten county and rural unitary councils are not confident of setting a balanced budget next year, the County Councils Network has said.

The research, which gathered responses from 28 respondents who were asked about their confidence in setting a balanced budget for the next financial year (2026/27), also suggested that county and rural councils are facing a £2.2bn funding gap.

In total, just 40% of respondents said they were certain or confident of setting a balanced budget, with councils reporting that surging demand and higher costs are to blame for the funding gap.

Elsewhere, the survey revealed that Government compensation for the rise in employer's National Insurance has covered just 40% of the costs of introducing the policy.

The financial challenges come despite the council finding savings worth £1.2bn in order to balance their budgets this year.

The CCN warned that county and rural councils could be hit with further funding woes as a result of the Government's plans to change how funding is allocated in its review of relative needs and resources due to conclude later this year.

The organisation claimed that the changes could redistribute hundreds of millions of pounds towards urban councils.

In light of the circumstances, the CCN warned against cuts in the Government's Spending Review, which the chancellor is set to present to Parliament on Wednesday next week (11 June).

Cllr Tim Oliver, chair of the CCN, said: "It is almost unthinkable to imagine the situation getting worse, but a real-terms cut in the Spending Review for the Ministry of Housing, Communities and Local Government's Budget would be just that.

"For county and rural councils, it could be a double whammy, with any unfair changes to funding distribution leading to further reductions in their income."

He continued: "Funding reductions would undoubtedly make it worse for these authorities and lead to more service cuts and councils applying for exceptional financial support.

"It is therefore essential county and unitary councils receive a significant increase in funding and long-term financial certainty in the Spending Review and Review of Relative Needs and Resources."

Adam Carey