An Eastbourne Borough Council member says the funding system for local government is ‘broken’ after a survey found that two thirds of council housing budgets are on the brink of collapse.

Southwark Council has published the results of a survey of 76 ‘stockholding’ councils (those that manage their own council homes), a cross-party group of authorities collectively managing more than 870,000 council homes across the country.

Following their major report signed by 109 cross-party councils, this survey reported that some councils across the country had to reduce their maintenance of council homes, cancel new build projects and even sell off existing housing stock.

Councillor Peter Diplock, Cabinet Member for Housing and Homelessness for Eastbourne Borough Council, said: “The entire funding system for local government is broken, with the effects being felt most keenly in housing and social care.

Councillor Peter Diplock has said that the funding system for local government is ‘broken’ after a survey found that two thirds of council housing budgets are on the brink of collapse. Picture: EBC

placeholder image — Councillor Peter Diplock has said that the funding system for local government is ‘broken’ after a survey found that two thirds of council housing budgets are on the brink of collapse. Picture: EBC

“The impact has spread to include ordinary working families and the elderly, alongside the most vulnerable in our community. Without direct government support, vital local services, including housing, face the bleakest of futures.”

The survey found nine in ten council housing budgets under financial stress, taking or expecting to need to take substantial action or use emergency funds to balance their books by 2029.

For example, 61% of councils have already cancelled, paused or delayed housebuilding projects and more than one third have cut back on repairs and maintenance of council homes.

In order to balance their budgets before the next general election: 71% of councils expect to cancel, pause or delay current projects; 68% expect to scale back their overall commitments to redevelop or build new council homes; and 28% expect to sell off existing council homes to make ends meet.

Even with these steps, 67% of councils say there is a risk they will not be able to set a balanced budget. Nearly half of councils told Southwark they have been forced to use their reserves – funds meant to cover emergencies - to cover day to day spending. More than a third reported that they would empty these emergency funds by the end of this parliament.

Responding to the anonymised survey, councils also reported being in discussions with government about exceptional financial support and fearing soon being unable to meet even their statutory obligations.