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%.

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