The BBC has just reported that Councils in England are now in a state of financial crisis, with many facing effective bankruptcy in the next few years unless the funding system is reformed, according to a new report.

This coincides with our report published today regarding two-thirds of councils surveyed by the Local Government Association (LGA) warn communities will see cutbacks to local neighbourhood services in 2024 – such as waste collection, road repairs, library, and leisure services – as they struggle to plug funding gaps.

More than half the councils that responded to a survey said they were likely to be unable to balance their books in the next five years.

Two-thirds said they were cutting services.

In their sights first are parks, leisure facilities, arts and culture.

There have been constant warnings about the state of council finances, with the government desperately attempting to stop negative news reports and announcing an extra £600m of funding earlier this year to help plug budget gaps – effectively a sticking plaster as councils financially bleed out.

Despite the extra drop-in-the-bucket funding, many councils are now setting budgets that will see service cuts starting in April, at the same time as increasing council tax and charges to the maximum permitted.

The Local Government Information Unit surveyed senior council leaders and officers, with responses from 128 authorities in England. Contrary to the Local Government Authority reports, which found that 70 percent of councils were looking to cut expenditure, it found that nine in 10 plan to raise council tax and increase fees and charges for things such as parking and environmental waste.

Nearly one-third of the councils that responded intend to cut spending on parks and leisure, with another third cutting arts and culture and one in ten cutting services for children with special educational needs and disabilities.

The BBC report quotes Jonathan Carr-West, chief executive of the Local Government Information Unit (LGIU), who said: “This year’s State of Local Government Finance report reveals the desperate, ruinous financial situation councils find themselves in. Cutting services, borrowing more money and spending reserves year after year is completely unsustainable. Citizens are being failed. With over half of councils warning us they are at risk of bankruptcy within the next Parliament, it is no longer possible to blame individual governance issues.”

Carr-West went on to say that this was a “systemic” issue and that widespread reform of the system, including multi-year settlements, was desperately needed.

Speaking to BBC Breakfast, he said that “the brunt of the cuts fall on discretionary services… but just because they’re not legal requirements, doesn’t mean they’re not important: libraries, arts and culture, green spaces. All of these are the things that make places good to live in, and they’re the things most citizens experience from the council.

“If you’re not in care or you don’t have a relative in care, you don’t have a child with special educational needs, you don’t see much of that spending, which is the vast majority of council spending, so for most citizens, what they’re seeing is a really rapid decline in what they feel the council offers them.”