NAO warns of fresh council cash crisis


A National Audit Office (NAO) report into the financial sustainability of England’s local authorities has revealed that around 30 county and unitary councils are now facing such severe financial pressures that they will have no reserves left by 2022 at current spending rates.

The report warned: ‘The financial health of local authorities across England is getting worse.’


More than 10% of councils with care responsibilities – at least 15 authorities – could use up their reserves within three years, the auditors claimed.

Privately, NAO sources have suggested this group of councils are among those ‘most exposed’ to the financial risks that faced Northamptonshire CC before it imposed the sector’s first Section 114 notice for almost 20 years.

In addition, the auditors’ report raises concerns about the financial future of around 14 district councils, which could also run out of reserves by 2021/22.

NAO sources have been impressed by councils’ ability to cope with eight years of austerity, but the scope and depth of financial problems are now such that auditors are warning Whitehall to improve its co-ordination of local spending cuts or risk making matters worse.

The NAO study warned: ‘The Ministry of Housing, Communities and Local Government (MHCLG) has made improvements in understanding the sector’s financial position since the NAO’s last report in 2014 but because the responsibility for services is spread across departments there is no single view of how funding cuts are impacting the whole of local authority services.’

Aileen Murphie, the NAO’s value for money director for MHCLG, said: ‘Better Whitehall co-ordination is required. Maybe some combination of MHCLG, Treasury and Cabinet Office could be used to achieve this.’

The study also highlights the extent that care-providing authorities are increasingly skewed towards a ‘narrow remit’ of adult and children’s services.

Head of the NAO, Amyas Morse, said: ‘Current funding for local authorities is characterised by one-off and short-term fixes, many of which come with centrally-driven conditions. The Government risks sleepwalking into a centralised local authority financial system, where the scope for local discretion is being slowly eroded.’

Chairman of the County Councils' Network, Cllr Paul Carter, said: 'We have done what ministers have asked in using our reserves, but this is a slippery slope to insolvency.

'It is unfair to use yearly council tax rises to mask budget cuts and historical underfunding in rural areas.

'Failure to recognise the growing plight of many councils, as outlined in today’s report, could mean that Northamptonshire will not be the last local authority to face financial crisis.'

Shadow local government secretary Andrew Gwynne said: 'From bin collections to libraries, local services are suffering death by a thousand cuts.

'Working people and ordinary families are paying the price of councils being forced to cut back and close essential services.'

Shadow minister for local government Jim McMahon, added: '[Local government secretary] Sajid Javid has overseen the civic destruction of local public services and facilities with little care or understanding of the consequences.

'His legacy will be a system not just at breaking point, but broken completely unless urgent action is taken.'

A Government spokeswoman said: ‘We are currently working with councils to undertake a review of their needs and resources. Our consultation on this closes on Monday and all responses will be considered as we look to devise a new funding system.’

This story first appeared on

Register now for full access

Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

comments powered by Disqus
highways jobs

Environment Officer

Kirklees Metropolitan Council
£29,909 – £32,233 Grade 11 - £33,136 - £35,229
All Environment Officers lead, project manage and/or co-ordinate large environmental projects... Huddersfield, West Yorkshire
Recuriter: Kirklees Metropolitan Council

MCA Hub Co-ordinator

Camden London Borough Council
£40,028 - £46,431
You will lead on the co-ordination of the North and Central Area Mayor’s Construction Academy (MCA) Hub. London (Greater)
Recuriter: Camden London Borough Council

Highways Estimator

Competitive Salary
As the Highways Estimator you will join a busy environment and become an integral part of the team. Hounslow (London Borough), London (Greater)
Recuriter: Ringway

County Highways Manager

Lincolnshire County Council
£55,503 - £60,578
Seeking a highly motivated leader and an excellent communicator, who has a proven ability to build relationships and trust, leading by example. Lincolnshire
Recuriter: Lincolnshire County Council

Local Highways Manager (East) - Lincolnshire County Council

Lincolnshire County Council
G12 £43,662 - £50,430
Seeking someone who combines excellent technical knowledge with a dedication to the customer. Lincolnshire
Recuriter: Lincolnshire County Council

Assistant Director (Planning, Regeneration & Transport)

Rotherham Metropolitan Borough Council
£87,791 per annum  
This is an exciting time to join Rotherham and make a real difference. We are looking for an outstanding Assistant Director who will bring... Rotherham, South Yorkshire
Recuriter: Rotherham Metropolitan Borough Council

Corporate Director

Islington London Borough Council
Up to £135k
You will share our values and be passionate about helping us shape the Islington of the future. Islington, London (Greater)
Recuriter: Islington London Borough Council

Assistant Engineer

Cambridgeshire County Council
£21,074 - £30,756
Looking for strong team players interested in working with a variety of professional and community partners across Cambridgeshire. Cambridgeshire
Recuriter: Cambridgeshire County Council

Junior Energy Manager Apprentice

Brent Council
£15,000 p.a. inc.
The right person for this job will be pro-active and innovative in finding a way forward. Wembley, London (Greater)
Recuriter: Brent Council

Career Grade Drainage Engineer

Swindon Borough Council
£19,092 to £40,680 p.a
Working in the asset management team, you’ll support the work of the Lead Local Flood Authority (LLFA) and Highways Authority. Swindon, Wiltshire
Recuriter: Swindon Borough Council

Highway Construction Project Manager

Brent Council
£50,442 - £53,526 p.a. inc.
We are looking for an accomplished highway construction project manager to support the delivery of two high priority highway schemes. Brent, London (Greater)
Recuriter: Brent Council

Traffic Signals & UTMC Manager

Bristol City Council
£42,683 - £45,591
Looking for someone with proven management experience, enthusiasm, creativity, vision and good communication skills. City of Bristol
Recuriter: Bristol City Council

Principal Highways Project Engineer

Knowsley Metropolitan Borough Council
£34,106 - £35,229 per annum
The post holder will be responsible for project managing the delivery of two highway projects on the Key Route Network. Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Traffic Schemes Officer

Oxfordshire County Council
£22,021 - £29,636 per annum
An exciting opportunity has arisen to play a central role with the Traffic Team in the maintenance of the highway network... Kidlington, Oxfordshire
Recuriter: Oxfordshire County Council

Traffic Engineer

Telford & Wrekin Council
£29,055 to £30,756
This is an exciting opportunity to join Telford & Wrekin Council’s Traffic Management Team! Telford, Shropshire
Recuriter: Telford & Wrekin Council

Assistant Engineer – Traffic Regulation

Telford & Wrekin Council
£23,866 to £25,463
This is an exciting opportunity to join Telford & Wrekin Council’s Traffic Management Team. Telford, Shropshire
Recuriter: Telford & Wrekin Council

Highways Quantity Surveyor

Leicester City Council
£30,756 - £33,136 pro-rata per annum
Working in the Highways Maintenance Group, you will be responsible for the operational highway maintenance activities Leicester, Leicestershire
Recuriter: Leicester City Council

Highways Engineer/Inspector

Royal Borough of Greenwich
£22956 - £32637 per annum
Highways Engineer/Inspector - PermanentThere are plenty of reasons to take a closer look at Royal Greenwich.Royal Greenwich is undergoing a huge trans England, London, Woolwich
Recuriter: Royal Borough of Greenwich

Engineer - Bridges

Cambridgeshire County Council
£32,825 - £35,401
We have a vacancy for a Structures Engineer working within the Bridge’s team! Cambridgeshire
Recuriter: Cambridgeshire County Council


Cambridgeshire County Council
£32,825 - £35,401
You will be required to lead the delivery of a wide range of highway improvements and maintenance projects... Cambridgeshire
Recuriter: Cambridgeshire County Council