Some councils will not be able meet their minimum legal requirements of care due to a £5 billion black hole in town hall budgets, a union leader has warned.

Unison head of local government Mike Short issued the warning after a BBC investigation revealed councils expect to have a funding shortfall of £5.2 billion April 2026 even with £2.5 billion of cuts.

Short said: “This is not a sustainable situation. Local authorities simply don’t have the funds to provide even statutory services.”

The BBC analysis found the average council faces a £33 million deficit by 2025-26, up by 60% on £20 million two years ago. Social care services face cuts of at least £467 million.

Professor Martin Green, chief executive of Care England, said: “The BBC’s findings while alarming, do not come as a surprise. The warning lights have been flashing for a long time. There is simply not enough money in local systems. Our Sector Pulse Check, published with the national learning disability charity Hft, found 42% of care providers reported they have had to close down part of their business or hand back contracts to local authorities due to cost pressures. This is despite the demand for care services growing.

“Without central government properly funding local councils, the demand will continue to far outweigh the ability of the care sector to respond. Without having the right care in the right places, vulnerable people across England will be unable to access the support they need. Care England will continue to call on government to recognise the vital service adult social care provides, and to implement a long-term funding plan to ensure nobody is left without access to the support they need.”

Cllr Shaun Davies, chair of the Local Government Association, said: “Inflation, the National Living Wage, energy costs and ongoing increasing demand for services are all adding billions of extra costs onto councils just to keep services standing still.  

“Councils are having to make cutbacks to services to meet their legal duty to balance the books this year and using reserves to plug funding gaps. Councils hold reserves so they can plan for the future and deal with known risks. They can only be spent once and using reserves is not a solution to the long-term financial pressures that councils face. 

“Councils’ ability to mitigate these stark pressures are being continuously hampered by one-year funding settlements, one-off funding pots and uncertainty due to repeated delays to funding reforms.”

“The government needs to come up with a long-term plan to sufficiently fund local services. This must include greater funding certainty for councils through multi-year settlements and more clarity on financial reform so they can plan effectively, balance competing pressures across different service areas and maximise the impact of their spending.”

Sheila Norris, joint chief executive of the Association of Directors of Adult Social Services, said: “The BBC report is in line with what social care directors reported in our survey in June. Nearly two-thirds of councils were overspent on their adult social care budgets last year, and most of those used one-off reserves to cover the shortfall. Once reserves are spent, they are gone: clearly councils can’t go on doing that.

“The savings needed in social care budgets this year are even higher, £806 million across England compared to £567 million last year, so it’s no wonder that three-quarters of social care directors are only partially confident they will be able to make those savings.

“For decades the amount of support and care people need to live the lives they want has been growing faster than funding for social care. Through these years of chronic underfunding, social care directors have become used to finding innovative ways to save money and still provide the support and care older and disabled people in their communities need. But the financial pressures have become so great over that time that now many who need care and support, can’t get it.

“The situation isn’t sustainable. Extra funding from the government will help this year and next, but we can’t go on just patching up the pressures on the system. We need a properly funded plan for social care over the long-term to provide the care and support that people need today, and to transform social care so we’re able to provide the support people will need in a decade and beyond.”