Nearly half of social care councils expect to seek emergency bailouts

More than a third of English councils expect to need emergency government bailouts over the next three years, with authorities responsible for adult and children’s social care facing the greatest financial strain, according to a new survey by the Local Government Association (LGA).

The findings come as councils continue to grapple with rising demand and escalating costs in social care, which the LGA warns are outpacing recent increases in funding and threatening the sustainability of frontline services.

Almost half of councils with social care responsibilities said they were likely to apply for Exceptional Financial Support (EFS) between 2026/27 and 2028/29. These arrangements allow authorities to borrow or use capital receipts to cover day-to-day spending, including in some cases raising council tax above referendum limits. The LGA said such measures were increasingly being used to plug funding gaps but were not a long-term solution.

The pressure is already being felt in budget planning. Nearly seven in 10 social care councils told the LGA it would be difficult to set a balanced budget for 2026/27, compared with 58 per cent across all councils. While most authorities remain confident they can meet their legal duties in the short term, confidence drops sharply over time. Among social care councils, only a third said they expected to have sufficient funding to meet statutory responsibilities by 2028/29.

The LGA warned that without urgent action, financial instability would translate into reduced preventative services, growing strain on social workers and care providers, and greater risks for children, older people and adults with disabilities who rely on council support.

Demand for statutory social care services continues to rise, driven by an ageing population, increasing complexity of need, and growing pressures within children’s services and special educational needs and disabilities (SEND) provision. The association said structural underfunding of high-needs SEND budgets was creating particularly acute financial risks for councils with social care responsibilities.

Cllr Louise Gittins, Chair of the LGA, said councils were doing everything possible to protect essential services but were being overwhelmed by financial pressures. She said demand and costs were rising faster than funding, leaving many authorities with little choice but to consider emergency financial support.

“Short-term fixes will not address these challenges,” she said. “Councils need sustainable funding and reform so they can focus on prevention, growth and delivering the services communities expect.”

The LGA is urging the government to provide a significant uplift in funding in the forthcoming Local Government Finance Settlement, alongside longer-term reform of how councils are funded. It has called for a cross-party review of council tax, business rates retention and other revenue sources, as well as urgent clarity on future SEND funding.

For social care leaders, the survey reinforces long-standing warnings that financial instability is undermining early intervention and driving councils into crisis management. The LGA said underfunding was already leading to fewer neighbourhood services, reduced investment in prevention and increasing pressure on overstretched social care teams.

The survey was completed by chief finance officers from 154 of England’s 315 principal authorities, a response rate of 49 per cent. It found that 47 per cent of social care councils expect to seek emergency financial support at some point over the next three years, compared with 34 per cent across all councils.

With spending pressures continuing to rise, the LGA warned that without sustained investment in local government — particularly in adult and children’s social care — councils would struggle to maintain statutory services, let alone deliver the preventative support needed to improve long-term outcomes for vulnerable people and families.