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On a funding cliff-edge?

BY David Hawkes | February 5, 2024

Readers will be aware of the funding pressures currently being experienced by local authorities. According to the Local Government Association, by 2024/25 cost and demand pressures will have added £15 billion (almost 29%) to the cost of delivering council services since 2021/22. This comes after central government grant funding for councils dropped by 40% in real terms between 2009-10 and 2019-20 (from £46.5bn to £28bn). Since 2021 six local authorities have declared themselves effectively bankrupt and it seems likely that more will do the same.

These funding pressures have serious implications for AdviceUK members. Although some have successfully diversified their funding base, many are heavily dependent on local authority funding to deliver their core services to clients. Local authority budgets for 2024/25 are being set this month and some AdviceUK members fear that their grants may be either reduced or cut entirely. These concerns are particularly acute for members operating in local authorities who have issued section 114 notices, which restrict all spending except for that which funds statutory services. Advice services are not a statutory service and as such are at particular risk in these local authority areas.

AdviceUK has already been approached by a number of members who may have to either reduce their services or close completely. This comes at a time when they are already operating at full capacity and cannot meet the increased demand for advice as result of the cost of living crisis.

AdviceUK is closely monitoring this situation and will report on how this alarming situation develops in future editions of our newsletter.
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Image credit: Jonas Wurster