The County Councils Network (CCN) has warned that local authorities across England, especially those in rural areas, are facing an unprecedented financial crisis. The majority are set to significantly increase council tax, a measure intended to protect local services and secure financial stability. This trend, as highlighted by the CCN, shows that a vast majority of councils are planning to raise council tax by at least 4.99% in April, a decision propelled by severe funding challenges and the crucial need to maintain services.

Recent years have seen a dramatic shift in local government finance, highlighted by eight councils issuing section 114 notices in the last six years - a declaration of insolvency not seen since 2000. This situation stresses the dire financial straits of many local authorities, as they strive to close significant funding gaps and prevent further financial distress. Particularly in rural areas, where unique demographic and economic factors come into play, the systemic issue of increasing service demands versus dwindling government support has forced local authorities to rely on council tax hikes to bridge funding gaps.

The Rural Reality

For rural England's residents, the proposed tax increases signal growing concerns over the sustainability of vital local services. The CCN reports that the average Band D household will face an increase of £103 over the next year, further straining households amid the cost-of-living crisis. The additional cost of delivering services in rural areas, due to lower population densities and vast distances, exacerbates the precarious financial sustainability of rural councils. Despite planning over £1 billion in in-year savings, county and unitary local authorities in CCN membership face a collective funding gap of £1.1 billion over the next two years.

A Call for Comprehensive Reform

The need for comprehensive reform is acutely felt across rural England. The CCN advocates for overhauling the legislative framework for school transport and capping fees in the children's social care market. While some councils are taking steps to mitigate the impact on vulnerable residents, such as offering support for low-income households, these measures do not tackle the funding crisis's root causes.

Further details and data compiled by CCN can be found here

Kerry Booth, Chief Executive of the Rural Services Network: "The financial crisis engulfing England's local authorities, particularly in rural areas, demands urgent and strategic action. Relying on council tax increases offers only temporary relief and highlights the need for systemic reform. We know that rural residents pay on average 20% more per head in council tax due to years of underfunding of council services. We must move towards a funding framework that addresses the specific challenges of rural service delivery, ensuring local authorities can support their communities without undue financial burdens. As the only national body championing the needs of rural local authorities, we the Rural Services Network will work to ensure that, with a general election on the horizon, the incoming government prioritises a long-term funding plan to secure the sustainability of local services. Our rural communities deserve no less."