According to the Levelling Up Committee, additional local authorities may declare bankruptcy in the absence of assistance and services will be at risk.
“Systemic underfunding of local councils in England” is the finding of a report on financial difficulties in the organizations produced by the Levelling Up, Housing and Communities Committee.
The cross-party group called on the next government to reform council tax and overhaul the wider funding system for local authorities “to ensure council finances are put on a sustainable footing”.
And the chair of the committee, Labour MP Clive Betts, said if the government “fails to plug this gap, well-run councils could face the very real prospect of effectively going bust”.
Explainer: Why are councils going bankrupt?
The state of council funding has increasingly been in the headlines after the likes of Birmingham City and Nottingham City were effectively declared bankrupt last year.
Levelling Up Secretary Michael Gove last week unveiled a £600 million support package, the most of which will go toward social care budgets, to deal with the “unprecedented challenges that they have faced”.
