UK councils face £4 billion funding gap, Unison research shows

Research by the trade union Unison reveals that local authorities across England, Scotland, and Wales are facing a massive funding gap. Analysis of freedom of information requests from 368 councils indicates a combined funding shortfall of nearly £4 billion in the next financial year, a figure projected to rise to £7.1 billion by the following year.

London and the South East are disproportionately affected, accounting for the largest collective deficits. London boroughs face a shortfall exceeding £850 million, while the South East faces a gap of £785 million. Individually, Hampshire County Council faces a deficit of more than £138 million, and Woking District Council is projected to face a gap representing 85 percent of its revenue budget by 2027-28.

The findings have sparked criticism of a funding shake-up announced by Secretary of State Angela Rayner. The new rules aim to create a fairer system by diverting more money to authorities outside of London and the South East, specifically targeting areas that set lower council tax rates. Critics argue these changes punish well-run councils and may force residents to face higher tax bills to cover the deficits.