In July 2021, we reported UK councils faced a £3bn black hole in their budgets as they emerged from the coronavirus pandemic, based on an analysis of the budgets set by 170 upper and single-tier councils.
We found:
- Ten struggling councils in England were set to offset or borrow £290m after being given exceptional permission from the Ministry of Housing, Communities & Local Government to try to remedy what it called their “unmanageable pressures”
- UK local authorities - hit by falling income and increased costs - were set to make at least £1.7bn worth of savings in 2021-22 while also using more than £500m worth of reserves to balance the books
- Despite making those savings, local authorities at the time predicted a £3bn shortfall in their budgets by 2023-24
Although the central and devolved governments around the UK had issued billions of pounds worth of support for councils, the body that represents authorities in the UK said civic leaders were still left with large deficits.
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The approved cuts saw the threshold for which disabled or elderly individuals could receive care raised, bus subsidies scrapped and children’s centres closed in parts of the UK.
While councils had lost income through parking fees, planning and crematoria charges - they also lost millions when commercial investments took a downturn during the pandemic.
The Local Government Association said councils were not recompensed for their commercial losses - despite the UK government having encouraged town halls to invest over the past decade.
In response, the Ministry of Housing, Communities and Local Government said some struggling councils had let down their residents through "chronic financial mismanagement".
For our study we concentrated on the upper-tier authorities in England and Wales as well as the single-tier councils in Scotland and Northern Ireland.
Between April and June, we approached 217 councils in total, asking for details contained in each authority’s ratified budget for 2021-22 and their medium-term financial strategies.
We asked the councils to provide:
- Details of whether they had risen council tax in the budget and how the bill for a Band D property would be affected by the rise.
- Details of any savings planned for 2021-22 and how much of that applied to adult social services.
- Whether the council planned to use general reserves to support services in 2021-22.
- Whether the council’s medium-term financial strategy contained an as yet un-funded shortfall for the 2023-24 financial year and how much that shortfall was.
- Whether the council had applied for a capitalisation direction and how much it had applied for.
Our findings were shared in a spreadsheet, here. We also produced a detailed background pack, available here.
The Shared Data Unit makes data journalism available to news organisations across the media industry, as part of a partnership between the BBC and the News Media Association. This report was used in more than 40 local news outlets, including:
- Wigan Today: Wigan Council vows to protect services as £9m cuts loom 09 July 2021
- Aberdeen Press and Journal: Council cuts: Aberdeen City axes most from spending in pandemic 09 July 2021
- Insider.co.uk: Only five Scottish councils planning to make no cuts this year 09 July 2021
- Portsmouth News: Local authorities across Portsmouth facing tough decisions amid budget cuts 09 July 2021
- Sheffield Star: How council tax in Sheffield compares to rest of England after maximum rise 09 July 2021
- Daily Record: Scottish Councils plan to save £141m 09 July 2021
- Barking and Dagenham Post: Funding gap set to grow as council emerges from Covid pandemic 09 July 2021
- Wales Online: Councils face ‘£3 billion budget deficit’ as nation emerges from pandemic 09 July 2021
- Nottinghamshire Live: Nottingham City Council to make £16.7m savings this year amid 'exceptional pressure' and rising costs 10 July 2021
- Daily Record: Huge challenges still ahead despite no cuts this year, insist Renfrewshire finance chiefs 12 July 2021
- Cranfield and Marston Vale Chronicle: Marston Vale councils to make over £21 million in savings 12 July 2021
- Warrington Guardian: Warrington won’t seek ‘exceptional’ financial support 14 July 2021
- St Helens Star: St Helens not seeking ‘exceptional’ financial support 17 July 2021
The story featured among the morning bulletins on the BBC News Channel, the Today Programme, Radio Five Live, Radio 6 Music, as well as on local radio stations including BBC Radio Shropshire, BBC Radio Cambridgeshire, BBC Radio Hertfordshire and Greatest Hits Radio. It was also covered by BBC News NI and BBC News Online West Midlandsas well as on Politics North and Politics Worth West.
We have also looked at council finances in the following stories:
- 2020: UK councils fear bankruptcy amid Covid-19 costs
- 2019: English councils warned about 'running out' of reserve cash
You can find all coronavirus-related stories by the BBC data units tagged 'coronavirus' here