Nearly Half of England’s Councils Face Bankruptcy Risk by 2026

The National Audit Office warns of unsustainable council finances driven by rising social care costs, special education deficits, and delayed funding reforms.

• The National Audit Office (NAO) reports that 43% of England's councils could face bankruptcy by March 2026 due to a projected £4.6 billion deficit.
• Rising costs in adult and children's social care, which now account for 58% of council spending, have strained local budgets despite a 21% increase in service spending since 2015.
• Special educational needs and disabilities (SEND) funding has fallen far short of demand, with deficits expected to grow once a temporary funding override ends in 2026.
• Preventative services, such as public health and housing support, have faced deep cuts, shifting focus to urgent care at the expense of long-term solutions.
• The NAO calls for a comprehensive overhaul of local government funding, warning that short-term fixes are no longer sufficient to address systemic financial weaknesses.

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