Councils facing “black hole” in funding

Councils are facing a £1.5 billion black hole in their
budgets for next year with pressures across social services,
according to local government leaders, writes Mithran
Samuel.

The Local Government Association said the deficit would lead to
massive council tax hikes in 2006-7 unless the Treasury provided
emergency funding to meet the gap, as it had done for 2005-6.

The claims came alongside a survey revealing that the £637
million of extra funding, announced in December, alongside capping
threats, had kept council tax rises in England down to an average
of 4%.

The annual poll by the Chartered Institute of Public Finance and
Accountancy means most councils should escape capping, which
ministers threatened they would enforce against authorities that
increased taxes by more than 5%.