COUNCILS face a funding shortfall of more than £4 billion next year, with vulnerable adults and children set to be hit hardest, Unison warned in a report today.

Town hall finances remain in a “dire state” as rising inflation and energy costs, plus the growing demand for adult and children’s social care, are pushing fragile council budgets to breaking point, Britain’s largest union said.

Unison general secretary Christina McAnea said: “Councils are still billions short of the money they need to provide essential services.

“Local authorities are being forced to make cuts that often hit the most vulnerable hardest.

“After 15 years of ruthless austerity, no community has been left untouched.

“Front-line staff are exhausted, services overstretched, and thousands of jobs are under threat. Investment in councils, their communities and workers is urgently needed.

“This includes multi-year funding settlements so local authorities can plan more effectively and deliver services without the constant fear of collapse.

“Action is also needed to protect jobs, wages and employment terms threatened by council reorganisation.”

Despite a cash injection following Labour’s election victory last year, Unison estimated that the shortfall between what councils in England, Wales and Scotland, need to run services and what they receive amounts to £4.1bn in 2026/27.

The Ministry of Housing, Communities & Local Government aid: “We’re turning the tide on decades of underfunding in councils in England, with £69bn available this year for councils — that's a 6.8 per cent increase in cash terms.

“We are going further by fixing an outdated funding system to make sure money goes to the places and services that need it most, alongside multi-year finance settlements to give councils stability.”