Local councils face multi-billion pound funding shortfall over next two years

Responses to Freedom of Information requests and financial plans from 368 local authorities indicate that councils anticipate a combined shortfall of nearly £4 billion in 2027/28, which could rise to £7.1 billion the year after. The report notes that 35 councils will need over £1.5 billion in emergency support for 2026/27, a measure that typically involves borrowing that must later be repaid. Unison’s analysis shows London facing the biggest collective gap at £851 million, followed by the South East with £785 million.

Union general secretary Andrea Egan said the figures suggest movement in the right direction but stress that stabilization is not recovery, with four-in-five authorities struggling to balance budgets. She called for certainty on long-term funding and fair pay to retain skilled staff, emphasizing that both are essential for local services.