Councils are facing massive increases in costs due to spiralling inflation and the increase in energy costs, the Local Government Association (LGA) are warning today.
New analysis by the LGA and the Association for Directors of Environment, Economy, Planning and Transport (ADEPT) has estimated that the cost of street lighting, filling potholes and building new roads have soared, causing pressure on stretched council budgets and delaying works.
The analysis has found that:
- Councils have seen a 37.5 per cent increase in the cost of running and repairing street lights over the last six months, with some authorities reporting that their running costs have doubled.
- The cost of road maintenance has also increased, with a number of councils seeing a 22 per cent increase in the cost of repairing a pothole, relaying a road surface and other maintenance costs.
- Councils capital budgets, which support the building of new roads and other local infrastructure, have had an estimated rise of 21 per cent, pushing up the cost of delivering investment in local areas.
Councils are warning that global issues have had a particular impact on costs.
Prior to the war in Ukraine, an estimated 60 per cent of bitumen, a material used to repair roads across the country, was sourced from Russia and sold onto the European market. Since the Russian invasion, councils have had to ration the supply of the material and source it from other markets, pushing up costs and delaying road repairs.
Councils are also reporting that increasing costs for electricity, steel, lighting and cement are all impacting on their budgets. As well as this, areas preparing for winter have been hit by an increase of 60 per cent in the cost of salt.
The LGA, who represent over 350 councils in England and Wales, are calling on the incoming Prime Minister to urgently help meet these additional cost pressures in full as part of any new budget measures introduced.
Local councils are already facing a significant road repair backlog, with latest estimates suggesting it would take them 10 years and £12 billion to bring local roads up to scratch. These increased cost pressures could risk that backlog getting longer, with vital works having to be delayed.
Previous LGA analysis, published in June, showed that councils were facing £3.6 billion of unforeseen extra cost pressures onto council budgets in 2024/25 due to rising inflation, energy costs and the cost of meeting the new National Living Wage.
Cllr David Renard, Transport spokesperson for the LGA said:
“As this stark new analysis shows, councils across the country are facing unprecedented increased costs to repair our local roads, keep our street lights switched on and invest in improved local infrastructure.
“Global pressures, such as Russia’s invasion of Ukraine, as well as increasing inflation and a shortage of materials have all provided the perfect storm for councils and piled pressure on already stretched local budgets.
“To tackle this issue, the new Government must cover these increased costs for councils or risk roads condition getting worse or reductions in other services.
“Only with adequate long term funding – to cover increased cost pressures and invest in local services - and the right powers, can councils deliver for our communities, tackle the climate emergency, and level up all parts of the country.”
Mark Kemp, President of ADEPT said:
“Current inflation rates are having a massive impact on major capital schemes. Local authorities are doing all we can to identify additional funding to meet rising costs, but without a change to funding allocations from government, the funding gap problems that lie with local councils will worsen dramatically, increasing the risk of some schemes failing.
"Of course, it's not just major schemes. We face the same risks and issues with other grant allocations such as Bus Service Improvement Plans and Active Travel Schemes, where allocations based on bids made last year will not cover the cost of delivery. Without government support, some local authorities will have to prioritise highways maintenance and call a halt to new schemes."
Notes
The estimates and analysis used come from a snap of survey of around a dozen upper tier councils, as well as an analysis of current market prices.