Following on from a joint letter to the Prime Minister from the leaders of Kent and Hampshire county councils warning that both councils would be likely to be considering section 114 notices "within the next year or so", the Local Government Association (LGA) has also issued a dire warning about the additional cost pressures impacting on local authority service provision.

If Kent and Hampshire issue section 114 notices it would, effectively, be similar to warning that they would be on the verge of declaring bankruptcy and would only be allowed to finance statutory duties (in terms of service provision) and would be unable to authorise new spending.

For its own part, the LGA carried out a survey of local authorities which showed that most of them were planning to use reserves and cut services in order to plug their budget deficits so that they can meet their legal duty to "balance the books". The association also said that increasing council tax would not be sufficient to plug the funding gap unless the tax were to be increased by 20% and that "there are not enough reserves to plug funding gaps .... using up all revenue reserves would leave councils at high financial risk ..."

The survey showed that 88% of councils were planning to use reserves to meet new cost pressures this year and 76% were planning to use "efficiency savings or underspends". Cuts could include those to services such as homelessness prevention, child protection, care for older residents and disabled residents, leisure centres and waste collection services.

Whilst saying that it was undeniable that the Government faced a challenge getting public finances back on track and that the LGA wanted to work with Government to find a solution, the LGA Chair, Cllr. James Jamieson, added that "Local Government remains the fabric of our country but many of the vital services we provide face an existential crisis. Inflation is not going to come down overnight ..... Rising demand for services - and the extra costs to provide them - .... means that even having the same funding next year as they had this year would leave councils having to make significant cuts to services".

Looking for up to the minute updates on all selective licensing and PRS news? Follows us on Facebook Twitter LinkedIn