In July 2026 the Local Government Association warned that councils in England face a funding gap of £2 billion in 2026/27, growing to £4.3 billion in 2027/28 and £7 billion by 2028/29 — the amount needed simply to keep services at their 2025/26 level. A record 36 councils needed exceptional financial support to set balanced budgets this year. "The cost and demand pressures facing councils are unrelenting," said LGA chair Cllr Louise Gittins. "In just three years, councils will need around 25 per cent more money simply to stand still."
The 2026/27 budgets are now in force, and the next round is already open: Bristol's consultation on its 2027/28 budget closes on 25 November 2026, and Cheshire West and Chester's closes on 2 December 2026. Residents are being asked where savings should fall — on libraries, bins, roads, parks and leisure, the services people notice first.
Birmingham: out of section 114, but still cutting
Birmingham shows both how bad the crisis got and how slowly it unwinds. On 5 September 2023 the city council issued a section 114 notice — the formal step when a council cannot balance its budget — after equal pay claims of around £760 million and an in-year gap of about £87 million.
Its 2026/27 budget was approved by full council on 2 March 2026, by 40 votes to 37, with an extra £130 million for frontline services. The proposals carried nearly £95 million of savings, £66 million of them new this year. The extra money includes £40 million for cleaner streets, more fly-tipping enforcement, and libraries kept open for longer, with community hubs open for an extra day every week. Leader Cllr John Cotton said: "Now — thanks to two years of decisive action, tough choices, and a great deal of hard work — the Section 114 is gone, and we have ditched, once and for all, the tag of 'Bankrupt Birmingham'."
Westmorland and Furness: a £36.9 million gap closed on paper
Westmorland and Furness Council set a net revenue budget of £301.124 million for 2026/27. Its report to full council on 26 February 2026 put the budget gap at £36.9 million, driven by funding cuts, inflation and rising demand in adult and children's social care — particularly transport for children with special educational needs and disabilities — plus pressures across waste, housing and property. It closed the gap with £30.9 million of savings, £3 million from reserves and £3 million from provisions.
The savings are specific and visible: workforce redesign and job reductions, procurement savings, and new income from revised parking fees, a £60 garden waste subscription, charges for replacement waste containers and higher Windermere Ferry prices. The council's funding loss under the government's Fair Funding Review 2.0 was £12 million in 2026/27, rising to £43 million by 2028/29, with gaps of £16.3 million in 2027/28 and £32.8 million in 2028/29 still unresolved. In June 2026 a scrutiny report said a section 114 notice was "inevitable" unless £40 million in savings were found over the next three years.
Hampshire: £40 million saved, £179.7 million still to find
Hampshire County Council's total budget for 2026/27 is £3.3 billion, containing £40 million of savings. The cost of transporting children with special educational needs and disabilities to school has almost doubled in four years, from £43 million to £83 million. Hampshire says it received just £91 of general government funding per person in 2025/26, against an English average of £205.
The following year looks harder still. In August 2026 the council forecast a gap of £179.7 million for 2027/28 — about £124 for every Hampshire resident. Council leader Nick Adams-King said: "I will not pretend that a gap of this scale can be addressed through back-office efficiencies alone." He named the services most exposed: road maintenance, supported bus routes, libraries and countryside services. No decisions have yet been made on the 2027/28 budget, and he warned that reserves "can be spent only once".
Libraries: the Newham campaign that pushed back
In Newham, east London, budget plans approved in 2025 proposed cutting £1.6 million from the libraries budget over three years. Campaigners from Save Newham Libraries handed a petition signed by thousands of residents to the council in February 2026, and the council announced a partial reversal: staffing savings worth £470,000 were dropped, leaving £175,000 of efficiency savings over two years. The council said no libraries would close, opening hours would stay the same and no staff would be made redundant.
The campaign did not accept that as the end of it. One member told the Local Democracy Reporting Service: "Efficiencies means cuts and always has done." The council's cabinet member for libraries, Cllr Charlene McLean, told a cabinet meeting on 17 February 2026: "There will be no changes in opening hours or staffing as part of the library review."
The sums are small beside the original £1.6 million cut, but Newham's ten libraries have more than 134,000 registered users and 1.3 million visits a year. Campaigner Bobby Seagull has called them "warm, welcoming places where people connect, move, learn and belong".
Why care costs decide what happens to bins and roads
The biggest budgets cannot be cut in the same way, so the savings land where councils have discretion. Social care makes up the largest share of most councils' day-to-day spending: in Bristol, adult social care alone is budgeted at £284.8 million in 2026/27 — 20 per cent of the city's £1.43 billion total. The LGA says rising demand for homelessness support, children's services, adult social care and home-to-school transport will add cost pressures equal to 22 per cent of current spending by 2028/29 just to stand still.
So a £60 annual garden waste charge in Westmorland and Furness and charges for replacement bins are the direct result. Birmingham spent £40 million on cleaner streets and fly-tipping enforcement instead — the other side of the same coin.
What happens next
Bristol says its budget gap is projected at £26 million next year, rising to £67.5 million by the end of the five-year medium-term period. Its consultation, which opened on 14 October 2026, closes at midnight on 25 November 2026, and full council will take the final decisions on 9 February 2027. Cheshire West and Chester, which spends around £1 billion a year and faces a gap of around £40 million over the next four years, has its Let's Talk Budget consultation open until Wednesday 2 December 2026, with councillors due to decide the budget in February 2027.
Those dates are the point. A library's opening hours, a garden waste charge or a road repair backlog is not decided in a single dramatic announcement like a section 114 notice. It is decided in budget papers published in the winter, in consultation responses counted before a deadline, and in votes taken in February. Birmingham's recovery shows a council can come back from a section 114 notice; Westmorland and Furness and Hampshire show how quickly the next gap opens behind it. Anyone who uses a library, waits for a bin collection or drives over a pothole has until 25 November in Bristol, and 2 December in Cheshire West and Chester, to say so.