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It is vital the forthcoming provisional Local Government Finance Settlement also now fully funds the changes to employer national insurance contributions included in the Budget.

Ahead of the Budget, the LGA has made the case for government to address the cost and demand pressures, which have pushed many councils towards the financial edge.

One in four councils in England say they are likely to have to apply for emergency government bailout agreements to stave off bankruptcy in the next two financial years (2025/26 and 2026/27), a stark new survey by the LGA reveals today.

Councils face a funding gap of more than £2 billion next year (2025/26) as the Local Government Association warns against any “disastrous” further cuts in the Autumn Budget.

“We have been pressing for a pragmatic solution to the backlog in local audit so today’s announcement is positive. We are also pleased the Government has acted on our calls for backstop dates to avoid pre-election periods.

Cllr Peter Marland, Chair of the LGA’s Economy and Resources Board, said: “Public sector workers do an incredible job to keep local services running day-in, day-out. However, while it is good that the Government will fund higher pay awards for parts of the public sector, the announcement did not provide any additional funding for pay in local government. Pay awards in local government are funded through council budgets. Those budgets continue to face severe and unprecedented challenges and therefore the pay offer in local government needs to be affordable to the sector. “The LGA will continue

“This Spending Review will be critical to the future of our local services with councils facing a funding gap of more than £6 billion over the next two years.

"Local government’s offer to the next government is huge. Respect us, trust us and fund us. By working together as equal partners, we can meet the fundamental long-term challenges facing our communities.”

“We are pleased the Chancellor has extended the Household Support Fund (HSF), which has helped millions of households facing hardship. It is disappointing that we had to wait until the very last minute for an extension, and that it is only for a short period."

“Extra government funding will help councils this year, but acute funding pressures remain and are forcing many councils to make stark choices about what popular services to cut."