Almost half of councils responsible for social care may need emergency government funding within three years, a new survey shows.
New research by the Local Government Association (LGA) reveals nearly half of local authorities responsible for social care services are preparing to request emergency financial support from the government within the next three years.
Despite recent funding increases – including the three-year financial settlements, which are set to provide an extra £4.6bn for adult social care by 2028-29 – councils warn rising demand continues to put services under pressure.
According to the survey, 34% of councils have already applied for, or are likely to seek, exceptional financial support (EFS) in at least one year up to 2028-29. The figure rises to 47% among upper-tier councils, which oversee adult and children’s social care.
EFS allows local authorities to cover day-to-day spending through borrowing or capital receipts, and some can exceed the standard 4.99% council tax increase limit.
The government is due to publish its final 2026-27 settlement on Monday, and councils are worried that changes intended to shift funding to poorer areas could exacerbate budget gaps.
‘This research underlines the reality facing councils,’ Louise Gittins, chairwoman of the LGA, said. ‘Councils are doing everything they can to protect the services people rely on, but demand and costs continue to rise faster than funding, leaving many with no choice but to consider emergency financial support.
‘Short-term fixes will not address these challenges. Councils need sustainable funding and reform so they can focus on prevention, growth and delivering the services communities expect.’
The survey also highlights that 69% of councils anticipate problems setting balanced budgets in 2026-27. Just over half (51%) said they were not confident they could meet all statutory duties, rising to 66% among social care councils.
The LGA warned that four in five upper-tier councils could face effective bankruptcy as rising spending on special educational needs and disabilities (SEND) continues without reform.
Against this backdrop, councils are calling on ministers to write off SEND deficits that have been accumulated over the past few years. The government is expected to publish a White Paper on reforming the SEND system in the coming weeks.
Bournemouth, Christchurch and Poole Council has proposed raising council tax by 7.5% from April, breaking the standard 4.99% limit. The authority’s accumulated SEND deficit currently stands at £184m and is projected to reach £380m by March 2028.
A spokesperson for the Ministry of Housing, Communities and Local Government, said: ‘We inherited an outdated and unfair funding system and we’re taking action to fix this, making almost £78bn available for council finances next year.
‘We are delivering fairer funding, targeting money where it is needed most through the first multi-year settlement in a decade, giving councils greater certainty to plan and invest for the long-term.’
Rachel Harrison, national secretary of GMB, added: ‘Fourteen years of Tory underfunding has had devastating impacts on local government services and workers.
‘This year’s pay offer must be fully funded for all councils and schools to ensure no more services are cut and jobs lost to plug the funding gaps.’
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