New research has shed light on the concerning state of council finances in England, as nearly all councils report difficulty in balancing financial viability and positive citizen experience. 96% of finance leaders in local authorities admit they are struggling to balance financial stability with citizen experience as councils across England prepare for Local Government Reorganisation (LGR).
The findings from Access PaySuite came from a study that surveyed 100 finance leaders working in local authorities, as well as conducting focus groups with unitary authority leaders and industry expert insights, to understand the tensions at the heart of the reorganisation process.
As county and district councils are merged into new unitary authorities ahead of an April 2028 deadline, finance teams are being tasked with delivering savings and efficiencies while simultaneously protecting frontline services and improving how residents interact with their council.
The research suggests that, for the vast majority of authorities, this balance is not being achieved.
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Jamie Symons, head of product and engineering at Access PaySuite, said:
“This is a major piece of research which highlights common themes that are troubling finance leaders as they progress through the LGR transformation process. There’s no doubt that reorganisation is a huge opportunity, with the potential to improve services for residents, rebalance budgets and enable teams to deliver better work, but there are clear challenges ahead.
“The good news is that councils have navigated these challenges before and the focus groups we ran with those who’ve been through the process showed a consistent theme: while you can’t plan for every eventuality, you can build the capacity to discover it early.
“As we move towards April 2028, leadership, delivery teams, and suppliers will need to unite around a shared vision to make it a reality.”
The pressures behind the numbers
Councils are already facing financial strain from record council tax arrears, which have reached £7.4 billion in England, as well as £655 million of social housing rental arrears. Temporary accommodation (TA) costs are also playing their part in crippling council finances, with the cost of TA having risen by more than ten times since 2011.
There are several other compounding pressures that are making this balancing act harder to achieve:
- 36% of finance leaders said budgetary and funding constraints were the primary barrier to reorganisation.
- One in four reported that aggressive or unrealistic programme timelines were a key challenge.
- 38% said maintaining performance in statutory services, such as social care and waste management, was a key success metric for their programme.
Andrew Rogers is a Socitm associate with more than three decades of experience supporting local authorities on digital transformation projects. He said:
“A typical region could have 11 councils, and each council might have 200 applications each with significant overlap between them. However, the systems used by a typical district council will be very different to those in place with a county council. The key risk is being operational on day one when the environment you’re coming from is so complicated.”
