How many English local authorities might survive their imminent financial crisis?

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The Guardian has reported today that:

“Out of control” increases in child protection spending since the outbreak of the Covid pandemic have put one in 10 of England's biggest councils at risk of effective bankruptcy in the next few months, a survey has revealed.

Many county councils and unitary authorities are “running out of road” to avoid insolvency as they grapple with high inflation, increases in children being taken into care, and massive bills for children's homes, the County Councils Network (CCN) said.

Earlier this week, they reported:

England's housing crisis will push many local authorities into bankruptcy as the increasing cost of emergency accommodation for thousands of homeless families threatens to overwhelm council budgets, leaders have warned.

The worst-hit councils are now spending millions of pounds a year – in some cases between a fifth and half of their total available financial resources – to try to cope with an unprecedented and rapid explosion in homelessness caused by rising rents and a shrinking supply of affordable properties.

To be clear, local authorities are facing the risk of financial failure because of the rapidly rising demand for and cost of:

  • Housing for the homeless
  • Adult social care
  • Child social care
  • School transport

This is not spending on fripperies: these are essential elements within the social care safety net or in the provision of universal education.

So, will the government provide the funding needed? Or will they display the indifference that they showed towards need during the Covid crisis? Given that they have no moral compass, who knows?

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