England's Councils Face £4bn Funding Gap, MPs Warn

Even well-run local authorities risk bankruptcy due to systemic underfunding and increased service demands, with calls for urgent council tax reform and a fundamental review of council funding.

• England's councils are facing a financial crisis, with a funding gap of £4bn over the next two years, according to a report by the Commons Levelling Up, Housing and Communities Committee.
• The committee warns that even well-run councils are at risk of going bankrupt due to systemic underfunding and increased costs and demands for services, particularly in social care, transport for children with special educational needs and disabilities, and homelessness support.
• The government recently announced an extra £600m in support for councils, but the committee believes further funding increases are needed.
• The committee calls for a reform of the council tax system, describing it as 'outdated' and 'regressive', and urges the government to undertake a revaluation of properties and introduce additional council tax bands.
• In the longer term, the committee calls for a fundamental review of council funding, local taxation and the delivery of social care services.

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