Islington allays concerns over finances after quarter of UK councils warn of impending bailouts

Islington Town Hall. Photograph: Islington Council

Islington Council has confirmed it is not seeking emergency funding from the government – after research revealed a quarter of local authorities expect to need a bailout in the next two years.

A Local Government Association (LGA) survey released on Tuesday found that 25 per cent of council chiefs who responded were “likely to apply” for exceptional financial support (EFS) in 2025/26 and/or 2026/27.

EFS is a short-term government program to help local authorities avoid bankruptcy, providing capital resources so councils can fund day-to-day spending.

An Islington Council spokesperson said: “While there are undoubtedly financial challenges faced by all local authorities across the country, we have not petitioned the government for emergency funding.

“However, we continue to lobby the government through the Local Government Association (LGA) and other channels for increased and more certain long-term funding to provide councils with the stability they need.”

To deal with funding pressures, some authorities have taken to disposing of property, with Kent’s Medway Council selling off assets to the tune of £35 million.

When asked, the spokesperson for Islington said: “We have no plans to sell any assets to cover shortfalls in day-to-day spending.”

The survey data comes as local authorities in England are already facing a “funding black hole of more than £2 billion next year”, the LGA stated in a press release.

Among the top five pressures faced by councils were children and adult social care, special educational needs (SEND) services, school transport and homelessness.

Cllr Louise Gittins, LGA chair, said this year had seen “unprecedented” levels of emergency support for councils, and called on the government to do more for local authorities given the “extraordinary funding emergency”.

“As our survey shows, [many more] are being pushed into a precarious financial position.

“This is not just about numbers on a spreadsheet. Budget cuts needed to plug growing funding gaps will affect the most vulnerable members of society and the services our communities rely on every day.

“The Autumn Budget must provide councils with the financial stability they need to protect the services our communities rely on every day.”

The government website states that if authorities receive EFS they are expected to “continue to manage and mitigate their financial pressures, as well as respond effectively to the individual challenges they are facing and provide regular updates to the government on progress”.