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Three-quarters predict a financial crisis within the next year

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Almost three-quarters (74%) of council leaders and senior officers expect some councils will face a serious financial crisis in the next financial year, according to a new survey published by consultancy firm PwC.

That prediction is an increase from 54% who felt the same way in last year’s survey.

Of the 81 chief executives, finance chiefs and council leaders who responded to PwC’s annual survey, a third (33%) expressed fears they cannot deliver the required savings and maintain service delivery over the next three years. That number rocketed to more than 8 in 10 (81%) when savings were considered over the next five years.

Jonathan House, local government and health leader at PwC, said: “This year’s survey shows the significant step up in the challenge for local government leadership in securing the future for their councils, as well as ensuring they are financially sustainable.

“While local councils have done well against an ongoing course of challenges, the cliff edge for some is getting ever closer. With another spending review next year, as well as the UK’s formal exit from the EU, the landscape will become incredibly tough - the resilience they have shown so far will be tested to the max.”

On Brexit, almost three-quarters (74%) were not confident that central government will engage with cities and local government in reshaping regional investment and regeneration funds beyond Brexit. Just 12% of respondents could foresee their council proactively promoting city-to-city links overseas to find investment and promote trade for their local economies.

The survey also polled 2,000 members of the public. Of those, 46% were not able to agree or disagree on whether Brexit would impact positively on their local community.

Meanwhile, there are still concerns about councils’ vulnerability to cyber attacks. Of the council leaders and senior officers surveyed, confidence in their ability deal with a cyber attack was up from 53% last year to 58% this year.

On embracing digital technology, just 3 in 10 of those surveyed reported confidence that their council was “confidently embracing new technologies like AI [artificial intelligence] and robotics”.

The government announced in its industrial strategy plans to embrace technological solutions as an opportunity to develop local areas, however the PwC report finds that little change has been made in this area in the past year.

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