Today we're warning that short-term fixes will not resolve the financial distress threatening to derail councils’ efforts to cut emissions.

Responding to the Levelling Up, Housing and Communities Committee’s report on local authority funding, UK100 argues only fundamental reform can empower local leaders.

In a damning report on funding failures, the influential committee of MPs highlighted a £4b funding gap and concluded the next government faces major reform of local authority funding to ensure financial stability.

Responding to the report, UK100 Chief Executive Christopher Hammond says:

"This report by the committee won't shock anybody. Yet it serves as another damning account of the way councils have been pushed to the brink with piecemeal funding settlements, rising demand and substantial economic changes.

"The mounting overdraft of failure condemns local leaders to manage a decline in overstretched services, preventing all but the most ambitious and most well-resourced from accelerating action to achieve the UK’s climate goals

"A root-and-branch funding overhaul is long overdue and the only real solution to stop the downward spiral of council after council issuing effective bankruptcy notices. The Government needs to ramp up its move away from competitive funding pots with strings attached to long-term settlements that empower rather than curtail ambition.”

With a General Election on the horizon, UK100 is urging that parties of all stripes commit to funding reform as a matter of urgency.

“As we’ve seen in recent weeks, from the councils issuing Section 114 notices to the MPs fighting for a stronger financial settlement, local government funding is an issue that transcends partisan politics. We urge parties of all stripes to work together with local leaders to reform a failed system. With the right resources and responsibilities, every corner of the country has the chance to prosper,” Hammond adds.

UK100 has long called for an end to short-term, disjointed funding in favour of needs-based support.

Research suggests councils have spent up to £130 million bidding for limited pots since 2019 – cash diverted from delivery.

UK100’s recent Powers in Place report highlighted the current funding model as a major barrier, hampering the proper planning and supply chain growth necessary for ambitious climate action, from delivering warm homes to local energy security.

The MPs’ report was released in the week another local government network, New Local, produced a report proposing place-based public services budgeting.