Overview

• 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.