Earlier this month it was estimated there would be a £1.7 billion shortfall in local government finances due to inflation, payroll costs and cost of living increases. The Local Govt Association has now revised this upwards to £2.4 billion in 2022/23 and reaching £3.6 billion by 2024/25.

The most worrying risk (in governance terms) is the possibility of some councils effectively becoming bankrupt as, when the current funding arrangement with national government was made in January the factored in inflation rate was just 3%.

The LGA says that current cost spikes "could not have been predicted by either central or local government when the Government finalised the local government finance settlement earlier this year and councils set their budgets in March." and added that "this is forcing councils to rip up financial plans set just three months ago".

More severe cuts to local services are now front and center of the agenda including to bin collections, road maintenance (pothole filling), social care for older and disabled people, early intervention, homelessness prevention and support for low income households.

Cllr. James Jamieson, chair of the LGA said " ... the impact on our local services could be disastrous. This will stifle our economic recovery, entrench disadvantage and undermine government ambitions to level up the country."

The government has said (after the previous £1.7 billion estimated shortfall was reported on) that it was "working with the sector to understand the impact of emerging challenges on local authorities" and that it stood ready to talk with any local authority that had concerns about being able to balance its budgets.

Lest we forget - local authorities are under a legal duty to balance their budgets and this looks like it will be a big hole in in the local authority pot that someone will need to fill sooner rather than later.