Unite, the UK’s leading union, which represents thousands of local government workers, has launched a campaign calling for urgent reform of how councils are funded.

The Fair Funding campaign comes amid a backdrop of severe cuts to public services and jobs as well as a financial crisis in the sector.

Serious issues include:

1. Local government debt across the UK has doubled since 2010 and is now spiralling out of control. Despite funding per person set to increase by 7% by 2025-26, the Local Government Association estimates that councils will still face a funding gap of up to £8bn by 2028-29.

2. UK local authorities were £122bn in debt as of 2024, with government lenders charging high rates of interest.

3. Six councils have been declared bankrupt since 2021, with 43% of England’s 317 local authorities at risk according to data from the National Audit Office.

Unite believes that unless local government funding is urgently restructured, such as by offering local authorities debt and interest relief, councils will have to make the impossible choice of further cuts, using declining reserves to stay afloat or issuing a section 114 notice.

As part of the Fair Funding campaign, an early day motion has been tabled by Jon Trickett MP which calls on the government to restructure local authority debt to future-proof them against the need to cut jobs, pay conditions and critical public services.

Unite general secretary Sharon Graham said: “Local authority workers are the backbone of communities across the UK, providing many public services that are vital for a functioning society.

“Years of austerity have cut council services to the bone while workers and communities have been asked to pay the price. And while debt laden councils have been making cuts after cuts they have been spending a fortune on interest repayments, mostly to the Treasury at unfairly enhanced rates.

“There now needs to be an immediate overhaul of how all councils are funded before it is too late.”

Councils currently at risk of going bankrupt include Bradford, Middlesborough and Somerset. If a S114 notice is issued, current projects will be placed on hold and there will be cuts to public services, putting workers’ jobs and conditions at risk.

Meanwhile, years of swingeing cuts to local councils has led to a visible breakdown in public services, such as roads not being maintained and an increase in damage such as potholes, streetlights not being switched on, worsening quality of caring services and refuse collections happening less frequently. 

Cuts to local council services and budgets have also led to local government workers seeing their pay decrease by around 30 per cent in real terms since 2010. As well as worsening pay and conditions, councils have also had a problem with recruiting and retaining workers.

Unite national officer for local authorities Clare Keogh said: “This is a grave situation. It is about political choices – whether to press on with austerity and cuts or whether to invest in well-funded jobs, public services and communities.

“Councils need more financial support as a matter of urgency and Unite believes our campaign will push the government into making the funding system for council fairer. The time to act is now.”

ENDS

Notes to editors

Case studies

Tommy Bowler, a street lighting supervisor at Pembrokeshire County Council, said: “Staff and hours have been reduced, but at the same time more homes being built in our local authority means there are more streetlights we are responsible for. This has in turn led to a less quality service.”

Sharon Battishill, a care worker at Plymouth Council, said: “Many of my colleagues are taking on demanding second jobs or having to apply for benefits. This is causing them a lot of stress and fatigue on top of the fact they are overstretched with work.”

For media enquiries ONLY please contact Unite press officer Natasha Wynarczyk on 07970081524

Email: natasha.wynarczyk@unitetheunion.org Twitter: @unitetheunion