The Fair Funding campaign points out that many councils are in severe crisis. UK local authorities were £122 billion in debt last year, with government lenders charging excessive levels of interest to cash-strapped authorities. Meanwhile the Local Government Association (LGA) says English councils will still face a funding gap of up to £8 billion by 2028–29 and that 43 per cent of England’s 317 councils are at risk of bankruptcy.

Unite national officer for local authorities Clare Keogh warns that: “The time to act on fair funding for local councils is now. Workers and communities across the UK are suffering.

“This grave situation has to stop. The debt urgently needs to be cut or restructured otherwise more local authorities will go bankrupt, putting jobs and conditions on the line. We urge the government to make the right choice by rejecting austerity and choosing to invest in well-funded jobs and public services.”

Local government union Unison has warned of another threat to council services. It fears that plans to restructure councils across England will be costly and threaten already battered services.

Late last year, when people were too busy preparing for Christmas to notice, ministers announced plans to replace many “two-tier” council areas with “simpler local government structures”. These are supposed to “lead to better outcomes for residents, improved local accountability and savings which can then be reinvested in public services”. These will affect all councils in remaining two-tier areas and small unitary councils. This announcement also gave them an excuse to cancel the elections scheduled for May.

More detailed plans have now been produced and £7.6 million allocated to the 21 councils affected to implement the plans, which include proposals for unitary local government in Surrey.

It is claimed that this will reduce costs and make it easier for residents to understand where
responsibility lies for services. Savings will be reinvested in communities, the government
says.

Unison points out that many local authorities are effectively bankrupt and that the costs have
been greatly underestimated. £100 million is a more likely figure according to the LGA. In particular, there are unmentioned costs associated with upgrading IT and the revamp of entire departments.

Additionally NHS, social care, housing, transport reforms and the establishment of new Mayors will all affect the financial stability of new unitary authorities. Unison say that the extra £3.4 billion promised in the spending review “was a good start to Labour’s ambition to boost councils’ financial health” but after a decade and a half of austerity under successive Conservative-led governments, the new cash will be needed simply to maintain and restore essential services.

General secretary Christina McAnea said: “With the coffers almost empty, local authorities
will struggle to bear the cost of complex reforms when demand for social care, children’s services and housing is all soaring. That poses a risk for thousands of local government jobs. Crucial services on which some of society’s most vulnerable people rely could also be disrupted,” therefore: “Any council reorganization must be backed by proper central government funding, protection for workers and the support of residents and staff affected.”