The Local Government Association (LGA) has warned the government that devolution and growth ambitions will fail unless ministers first tackle a deepening council finance crisis.
In its Autumn Budget submission, the LGA – which represents councils across England – said it backed the prime minister’s plans for wider fiscal and English devolution, including new powers over skills, transport, employment support, housing and public services. A white paper setting out the reforms in full is expected after the Autumn Budget.
However, the organisation said councils also need access to funding and powers to deliver services and prosperity for residents, including in areas without mayors or strategic authorities.
It warned that financial pressure on councils has direct consequences for residents, including longer waits for adult social care assessments, rising homelessness, and cuts to neighbourhood services such as road maintenance, libraries, parks and waste collections.
Despite delivering billions of pounds in savings since 2010/11, councils face a £7bn funding gap by 2028/29, the LGA said. One in five councils with social care responsibilities needed Exceptional Financial Support from the government to set a balanced budget for 2026/27.
The LGA called on the government to:
- Deliver fiscal devolution through the forthcoming fiscal roadmap and white paper, covering both revenue retention and raising powers for councils
- Introduce a revised approach to Exceptional Financial Support that addresses underlying cost and demand pressures
- Reduce burdens on councils by reviewing sales, fees, charges and statutory duties
- Write off historic and accruing Dedicated Schools Grant deficits in full
- Ensure NHS budget pressures are not transferred to councils
- Fully fund reforms to the adult social care workforce, including a Fair Pay Agreement
- Set out a clear timetable for local government reorganisation
The LGA said councils contribute £117bn annually to local economies through service delivery, local economic strategies and their convening role in planning, transport, skills and infrastructure.
Councillor Eamonn O’Brien, chair of the LGA, said: “The Prime Minister is right to identify that the imbalance between national and local government is holding back growth. But you cannot devolve power if the foundations are financially fragile.
“If the government wants national, regional and local growth, it needs to fix the local foundations first. Strong, capable and financially sustainable local authorities are essential to deliver on our shared priorities for health, housing and giving people every opportunity to thrive where they live.
“Genuine devolution needs to reach every part of the country and every level of local government. Our Autumn Budget submission sets out how, with sustainable funding and meaningful powers, local government can deliver the homes, skills, public services and opportunities for our communities.”
Image credit: MEE KO DONG/Shutterstock
Read next: Accent strikes a conversation
Are you a social housing professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.
