Black hole in town hall budgets rises to £5bn

In August 2023, the BBC Shared Data Unit revealed that a black hole in local authority budgets continues to grow, prompting fears some will not be able to provide basic services.

The project involved surveying 190 upper-tier authorities in the UK to find out the extent of the financial difficulties facing town halls.

It revealed council chiefs expect to be £5.2bn short of balancing the books by April 2026 even after making £2.5bn of planned cuts.

The average council now faces a £33m predicted deficit by 2025-26 - a rise of 60% from £20m two years ago.

Background and briefing

A full briefing pack on the story can be found here.

Get the data

• Shared spreadsheet: Council finances 2023-24 (also as a CSV file here)
• ONS population figures: Estimates of the population for the UK, England, Wales, Scotland and Northern Ireland, Dec 2022. This excludes Westmorland and Furness and Cumberland, both created in April 2023. Their population figures were obtained from their websites (Westmorland and Furness and Cumberland)
• Council tax figures for England (excluding precepts) correspond to data published by the Department for Levelling Up, Housing and Communities and Ministry of Housing, Communities & Local Government: Band D Council Tax figures 1993 onwards (revised 19 May 2023). It excludes some local authorities, so these figures were collected from each council website.
• BBC calculations estimated the council tax figures for Scotland using data provided by local authorities. Likewise, Wales figures were obtained from data released by the local councils and the Welsh government. Domestic rate percentage increases for Northern Ireland were collected from each local authority website.
• Details on Somerset Council's commercial investments (xlsx file), via a Freedom of Information request

Visualisation

Interactive table with lookup: Predicted savings and deficits at upper-tier local authorities (UK, 2023-24 budget)

Interviews and quotes

• Neil Crouch, who had their respite eligibility removed due to council cuts
• Layla Barclay, who led the campaign to keep Gateshead Leisure Centre open
• Mike Short, Head of Local Government of Unison
• Cllr Shaun Davies, Chair of the Local Government Association
• Dame Meg Hillier MP, Chair of the Public Accounts Committee (PAC)
• Cllr Georgia Gould, Chair of London Councils
• Cllr Tim Oliver, Chair of the County Councils Network
• A spokesperson for the Department for Levelling Up, Housing & Communities
• A spokesperson for the Welsh government
• A spokesperson for the Scottish government
• Spokespeople for the upper-tier local authorities of Essex, Shropshire, Newry, Mourne and Down, Nottingham, Thurrock, Shetland Islands, Kingston upon Thames, Barnsley, Bradford, Leicester and Kensington and Chelsea

BBC and partner usage

This investigation featured across BBC platforms on the 21st of August 2023, including the BBC News website, News at Six and Radio 4's Today, as well as BBC Wales and around 20 other BBC radio outlets.

BBC Political Correspondent Alex Forsyth reporting on the council finances story on News at Six.

The Shared Data Unit makes data journalism available to news organisations across the media industry, as part of a partnership between the BBC and the News Media Association. The partnership generated over 80 stories, including:

• Belfast Live: Newry, Mourne & Down council to make 2nd highest savings in UK
• Birmingham Live: est Midlands councils need to save millions amid funding 'black hole' - how yours is doing
• Manchester Evening News: Three Greater Manchester councils set to be out of pocket by over £100 million due to finances 'black hole'
• My London: Huge London council funding black holes revealed - see how much yours is in the red
• The Scotsman: Service fears as Scottish councils wield axe to make £300m of savings this year
• The Yorkshire Post: Sheffield Council plans £48M of cuts to services as budget black hole looms
• Wales Online: Massive council financial black hole revealed - how much your local authority is in the red / The huge black hole in Welsh local council finances

The story also featured in the Daily Express and in both print and digital editions of The Times and The Economist.

Related repo

In July 2021, the BBC Shared Data Unit reported UK councils faced a £3bn black hole in their budgets as they emerged from the coronavirus pandemic (repo available here).