COUNCILS face a £8 billion black hole that would “severely hinder” their ability to help ministers boost sustainable economic growth, the government was warned today.

In its submission to the Treasury ahead of the spending review later this year, the Local Government Association (LGA) said urgent action was needed by Chancellor Rachel Reeves to ensure local authorities have the necessary financial headroom to deliver on the government’s priorities.

Analysis by the association found that at the current trend of rising costs and increasing service demands, councils face an eyewatering £21.4bn — a 29.8 per cent increase — to the cost of delivering services by the end of 2028-29.