{"id":1539,"date":"2024-02-01T10:27:03","date_gmt":"2024-02-01T10:27:03","guid":{"rendered":"https:\/\/260web.com\/news\/council-financial-crisis-out-of-control-mps-warn\/"},"modified":"2024-02-01T10:27:03","modified_gmt":"2024-02-01T10:27:03","slug":"council-financial-crisis-out-of-control-mps-warn","status":"publish","type":"post","link":"https:\/\/260web.com\/news\/council-financial-crisis-out-of-control-mps-warn\/","title":{"rendered":"Council financial crisis ‘out of control’, MPs warn"},"content":{"rendered":"

Council financial crisis ‘out of control’, MPs warn<\/p>\n

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\"Care<\/picture><\/span>Getty Images<\/span><\/div>\n<\/figure>\n<\/div>\n
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By Becky Morton<\/div>\n
BBC News<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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The financial crisis facing England’s councils is “out of control” with even well-run local authorities at risk of going bust, MPs have warned.<\/b><\/p>\n<\/div>\n<\/div>\n

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A cross-party committee said the government must plug a \u00a34bn funding gap to avoid a “severe impact” on services.<\/p>\n<\/div>\n<\/div>\n

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They also called for council tax to be reformed, describing the current system as “outdated” and “regressive”. <\/p>\n<\/div>\n<\/div>\n

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The government said it recognised the challenges facing councils and had announced an extra \u00a3600m in support.<\/p>\n<\/div>\n<\/div>\n

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In a new report, the Commons Levelling Up, Housing and Communities Committee said councils were being hit by “systemic underfunding”, as well as increased costs and demands for services. <\/p>\n<\/div>\n<\/div>\n

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The Local Government Association estimates councils in England are facing a funding gap of \u00a34bn over the next two years. <\/p>\n<\/div>\n<\/div>\n

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Labour MP Clive Betts, who chairs the committee, said: “If the government fails to plug this gap, well-run councils could face the very real prospect of effectively going bust.”<\/p>\n<\/div>\n<\/div>\n

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In November, Nottingham became the eighth council to issue a Section 114 notice in the past six years, which means it is effectively bankrupt.<\/p>\n<\/div>\n<\/div>\n

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In the previous 18 years no councils had done so. <\/p>\n<\/div>\n<\/div>\n

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Earlier this month the government announced an \u00a3600m funding boost for councils in England, following pressure from local authorities and MPs. <\/p>\n<\/div>\n<\/div>\n

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The figure is on top of a \u00a364bn funding package for 2024-25, which was announced in December. <\/p>\n<\/div>\n<\/div>\n

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The committee said the additional money was welcome but that it believed further funding increases were needed. <\/p>\n<\/div>\n<\/div>\n

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