The Lead Untangles: The weaponising of council finances by Reform
As election leaflets and social media posts appear claiming councils are 'bankrupt' we look into the numbers behind the claims
At a glance facts
Reform UK is making council tax and council funding a central theme of its local election campaigning.
The party’s publicity on social media and in its slick TV political broadcast feature the issue heavily, with examples of councils with high debts listed as examples of what’s gone wrong under the main two parties.
Each time, it lists the salary of the council’s chief executive along with data showing a percentage rise in council tax over recent years and debt level. Some also make reference to potholes, money “wasted” on translation services, and other local points of interest.
The conclusion each time is a simple slogan: “Your local council is broken, Reform will fix it.”
The question of how it will do so remains unanswered beyond creating a British version of DOGE to cut “wasteful” expenditure on the likes of cycle lanes and challenging climate change.
Context
Since the austerity era started in 2010, councils have increasingly found themselves required to do more with decreasing amounts of money. According to the Institute for Fiscal Studies [IFS], council funding from the central government fell 46 per cent in real terms between 2010-2020 and while there has been a small improvement since, it has been nowhere near enough to offset the previous cuts.
As a result, many councils have moved into commercial or property investment in a bid to increase funds, but this comes with risks both of harming private investment and of losing money if the gambles don’t pay off.
Amid the funding cuts, the cost of social care has ballooned and taken up an increasing chunk of budgets. According to LGA analysis, 51 per cent of council funding was spent on adult and child social care in 2013-14 compared with 61 per cent 10 years later. That means that less than 40 per cent of councils’ total spend was left for other services such as street cleaning, waste collection, youth services, and leisure centres.
In that time, multiple councils have effectively gone bust. While local authorities are technically unable to go bankrupt, they instead issue a Section 114 Notice which explains they cannot deliver a balanced budget and that any further spending beyond that on statutory services would be unlawful.
This usually leads to significant budget cuts and government intervention. Among those to have experienced this in recent years are Nottingham, Birmingham, Woking, Thurrock and Croydon, the latter on multiple occasions.
But the real picture is even worse than these examples suggest. According to the Local Government Association, an unprecedented 18 councils were given Exceptional Financial Support [EFS] from the Government in February to help meet their legal duty to balance their books. And in October, it reported that one in four councils in England believe they are likely to have to apply for emergency government bailout agreements to stave off bankruptcy in the next two financial years.
What the left is saying
“Last year, the general election was that opportunity to vote for change for the country. This year, the local elections are the chance to vote for change in your community.” Sir Keir Starmer
“[Reform is throwing everything at the local election] because they want to take advantage of voters feeling understandably let down by Labour and the Conservatives. But we are here to say that voters have another choice – a positive choice – instead of one of the tired old parties, or worse a party that is divisive, dishonest, in disarray.” Green Party co-leader Carla Denyer.
What the right is saying
“The Conservatives have failed and Labour will fail too. A vote for either is a vote for more incompetence, dishonesty and failure. We are ruled by an out of touch political class who have turned their backs on our country. Reform is the alternative.” Nigel Farage
“My friendly advice to Reform UK is to be careful what they wish for. Opposition is easy. Winning power would give them a chance to prove themselves as equal to the task. Or not, as the case may be.” Harry Phibbs, local government editor of Conservative Home
What happens next?
The local elections take place on May 1 and Reform has fielded candidates in almost every seat in the country. At a glance, its campaigning appears to be effectively limited to a vague suggestion that if you are unhappy with anything, you should vote Reform – an attempt to repeat capitalising on the sentiment which some would argue was the key to winning the Brexit vote.
If the party wins enough seats to gain influence on local authorities, it will have to prove it can deliver on its promises and find ways to fix the problems being highlighted in its campaigning.
Regardless of this, individual councils and collectives such at the LGA, the Society of Local Authority Chief Executives and Senior Managers [SOLACE] and Chartered Institute of Public Finance and Accountancy will continue to lobby for fairer funding and reforms to make council administration more manageable.
About The Lead Untangles: In an era where misinformation is actively and deliberately used by elected politicians and where advocates and opposers of beliefs state their point of view as fact, sometimes the most useful tool reporters have is to help readers make sense of the world.
The Lead Untangles is delivered each Friday by The Lead and focuses on a different complex, divisive issue with each edition.
About the author: Jamie Lopez is a freelance journalist operating in the North West. He has previous experience at local newspapers and was UK journalism's first ever dedicated regional cost-of-living reporter. He is also editor of and writes for as well as and .