Residents face 'double whammy' of council tax hikes and service cuts, PM warned

Families will face with a "double whammy" of reductions in services and higher council tax rates if the government does not step in with extra funding, Rishi Sunak has been warned. Credit:

More than 40 Tory MPs are threatening Rishi Sunak with rebellion if he does not announce emergency funding for local councils in the UK which are "under financial pressure like never before".

They've warned the prime minister they are "exceptionally concerned" that families will be faced with a "double whammy" of reductions in services and higher council tax rates as local authorities seek to deliver balanced budgets.

Both Nottingham and Birmingham councils filed section 114 notices - the equivalent of a business declaring bankruptcy - last year and in December ITV News learned that almost one in five council leaders in England expect to do the same this year.

Seven councils in total have issued 114 notices since 2020, out of a total of 317 and several have recently had to make cuts in order to stay afloat.

Ben Bradley, who is both the leader of Nottinghamshire County Council and the MP for Mansfield North, said: "County and unitary councils across the country are currently setting out their budgets for next year, with many proposing substantial reductions to highly valued local services as well as tightening of eligibility for care services.

"With council tax set to rise again this year, residents face a double whammy."

Some councils have blamed costly equal pay claims for their shortfalls after being ordered to pay compensation to victims of the gender pay gap but many more say they were left worse off by an autumn statement which provided no new funding.

The County Councils Network, which represents 23 counties and 13 unitary authorities, said ministers must "provide emergency funding for councils to prevent substantial cuts to local services, or worse, some authorities facing financial insolvency".

Forty-four Conservatives - including seven former cabinet members - one Labour MP and one Liberal Democrat, have backed the demands, warning the PM they could rebel in Parliament if he does not act.

In a letter sent to Mr Sunak, they said: "There is still an opportunity to rectify the situation and ensure MPs are able to support the vote on the Local Government Settlement within the House of Commons in early February.

"We would therefore urge you to do all you can to use the Final Local Government Finance Settlement to provide additional funding for local government to ensure that the councils in our areas can continue to provide the services that our residents depend upon on a regular basis."

They added: "As a fellow MP for a county area, we are sure that you will find the prospect of residents in county and rural areas being impacted in such a way at this time concerning."

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The County Councils Network says its members are set to overspend this year by £650m, with 45% to go on children’s services, 25% on adult social care, and 20% to be spent school transport services for children with special needs.

It said it is having "constructive" discussions with Downing Street but urged ministers to take immediate action.

Announcing the settlement, Levelling Up Secretary Michael Gove said: “We recognise councils are facing challenges and that is why we have announced a £64 billion funding package – a real-terms increase at an average of 6.5% – to ensure they can continue making a difference alongside our combined efforts to level up.”

A spokesperson for the Department for Levelling Up, Housing and Communities said: “The 2024/25 settlement will also see the most relatively deprived areas of England receive 18% more per home than the least deprived areas.”

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