FOUR out of five councils across Britain still struggle to balance their books despite modest improvements in local government finances, research by Unison has found.

The union’s annual report into council finances, released yesterday, found that councils are forecasting a combined funding gap of almost £4 billion in 2027-28, rising to £7.1bn by the following year and up from a predicted £4.1bn last year. 

Unison said recent central government settlements had eased some immediate pressures. 

But fast-rising demand for adult social care, special educational needs and disabilities (Send), housing, increasing costs and long-term underfunding meant most councils still lack the resources to rebuild financial resilience.

At least 35 councils required more than £1.5bn of emergency support in 2026-27 to set a legally required balanced budget.

London faces the largest regional funding gap at £851 million, followed by the South East at £785m, with significant pressures also identified in Scotland and Wales.

The report, which coincides with the annual Trades Union Congress in Brighton, comes as the government has paused much of its council reorganisation programme.

Unison general secretary Andrea Egan said: “The figures suggest councils are moving in the right direction, but stabilisation isn’t recovery.

“Prime Minister Andy Burnham’s government has rightly put devolution and stronger local services at the centre of plans for national renewal.

“Councils now need certainty about their future and the long-term funding to invest in prevention, and support workers delivering services.”

She said staff have experienced years of pay restraint while helping communities through austerity, the pandemic and the cost-of-living crisis, adding: “Fair pay for staff and sustainable funding for local government are not competing priorities. 

“Councils need both if they’re to recruit and retain the skilled workforce communities depend on.”