Councils in England are spending an average of 78% of their council tax and general funds income on adult and children’s social care, new figures have revealed.
The analysis by the Chartered Institute of Public Finance and Accountancy (CIPFA) uses a measure called net revenue expenditure (NRE) which excludes the fees, charges, or grants councils receive for specific services that people pay for.
It reveals the extent to which social care costs use up local government funds, reducing the ability to reallocate non-fee money to other local priorities, such as libraries or parks.
The social care burden falls disproportionately on different authority types, the report finds with county councils are spending the highest proportion of NRE on social care at 86% in 2024/25. That compared to London boroughs where the figure was 72%.
SEND-related deficits reach new records
The report also finds that special education needs and disability (SEND) related deficits have reached new records and are, on average, 20 times the size of councils’ unallocated financial reserves.
Demand for, and spending on, high-needs provision has outpaced dedicated schools grant funding, leading to “significant deficits” which are “causing significant financial stability issues”.
Last year, some of England’s largest councils warned the increasing cost of supporting children with SEND could push some local authorities to bankruptcy within a few years.
“The scale of the problem is overwhelming,” the institute said. “Drawing on reserves or similar short-term fixes will not be sufficient to resolve the deficit. It demands a strategic, long-term policy response to protect special education needs services and ensure financial sustainability.”
It called on the government to publish “comprehensive SEND reform as soon as possible”.
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Financial risk linked to homelessness is increasing
The report also warns that the financial risk linked to homelessness is increasing, with the problem disproportionately affecting London boroughs and non-metropolitan districts.
The ratio of homelessness spending in those areas hit a record high of 11% of NRE in 2024/25, compared to 2% and 3% in metro districts and unitary authorities.
The report says: “In 2024/25, English local authorities faced intensifying financial pressures as demand-driven costs and accumulated deficits further eroded already stretched budgets, undermining financial resilience.”
It concluded: “Councils must examine their financial resilience position through the lens of local context, including demand trends, reserves strategy, asset profile and capacity to pursue innovative approaches to delivering on local priorities.”
