Councils warn they will become 'little more than care services' unless government acts to fix financial crisis

The analysis reveals that the funding black hole is mainly fuelled by rising demand and costs in adult social care, children’s services and specialist home to school transport.

The CCN says that together they account for 83 per cent of the increase in costs that is forecast by 2030.

Special education needs demand has doubled in recent years in some parts of the region, with a Yorkshire Post investigation finding that parents were pulling their children out of school as the provision was not in place.

There were protests and rallies in parts of Yorkshire in April as parents called for radical reform of SEN, with Labour councillors in Leeds speaking out over "years of underfunding".

The CCN’s analysis found that even if local authorities increased council tax by more than three per cent every year, they would still be left to find billions each year in “undeliverable” service reductions.

Councils across the region are already suffering with significant budget deficits.

A recent report by the union Unison found that Bradford City Council is forecast to have a bigger shortfall than bankrupt Birmingham.

While a new survey of rural and county authority chief executives revealed that 16 could be at risk of declaring bankruptcy over the next three years.

Councils say that reform is urgent and want the government to act in the Budget on 30 October and next spring’s Spending Review.

Coun Barry Lewis, vice-chair of the County Councils Network, said: “Councils pride themselves on the quality and breadth of the care services that they provide to vulnerable people.

“But today’s new analysis shows the bleak financial outlook facing local authorities of all shapes and sizes.

“To meet all their projected service pressures, councils are staring down the barrel of a £54 billion funding black hole.”

Coun Lewis explained that council will have divert funding to areas like adult social care, leaving them “providing little more than care services by the end of this Parliament”.

“Ministers would therefore have no choice but to radically rethink the statutory responsibilities placed upon councils to prevent six in ten declaring bankruptcy by 2028,” he said.

“However, this unpalatable trade-off can be avoided by providing a substantive injection of resources to help shore up services this parliament, then embarking on deep and fundamental reform to address demand and market failures driving costs in children’s services, special educational needs, and adult social care.”

He added that this must happen “urgently”.

The Labour government has pledged to give councils multi-year funding settlements to provide greater stability.

In one of her first interviews in power, Rachel Reeves told the Yorkshire Post: “One of the big challenges that local authority leaders and councillors say to me is that they don’t know from one year to the next what their budget is going to be, so it’s very difficult to plan the future and get value for money.”

At the Labour Party Conference, the Centre for Cities think tank called for greater fiscal devolution to local and combined authorities.