West Sussex County Council warns of financial 'tipping point' as £30 million funding loss threatens local services

West Sussex County Council has issued a stark warning to the government that mounting financial pressures could push even well-managed local authorities towards a financial tipping point, potentially putting vital public services at risk.

The council says changes to national funding arrangements, rising demand for services and additional costs resulting from government policies are creating unprecedented challenges for its finances.

Council leader Jay Mercer has written to government ministers, including the Chancellor and the Secretary of State for Education, calling for urgent action to prevent further pressure on council budgets.

Among the biggest concerns is an estimated £30 million funding loss for West Sussex arising from changes introduced under the government's Fair Funding Review.

The authority is also facing a £5.1 million shortfall associated with supporting unaccompanied asylum-seeking children linked to immigration facilities at Gatwick Airport.

However, some of the most significant financial challenges involve special educational needs and disabilities, commonly known as SEND.

The council is projecting a Dedicated Schools Grant deficit of approximately £500 million by March 2028.

Although the government has accepted the council's SEND Reform Plan and agreed to provide a grant of around £183 million, the authority says it will still face a remaining liability of approximately £50 million.

Council leaders warn that uncertainty surrounding national SEND reforms is making it increasingly difficult to plan budgets and protect services over the longer term.

The financial concerns also come as local government reorganisation moves forward across Sussex, with plans to replace existing council structures bringing additional costs and uncertainty.

Councillor Jay Mercer, Leader of West Sussex County Council, said:

"West Sussex is a well-run council with a strong record of delivering value for taxpayers and protecting frontline services.

"However, we can no longer continue to absorb rising costs, increasing demands, and further uncertainties and we now risk reaching the financial tipping point that pushes even the most responsible authorities beyond the limits of what can be managed sustainably.

"Our message to Government is simple: councils need a fair funding settlement and greater certainty. Without action, local taxpayers will continue to shoulder the cost of national policy decisions while seeing increasing pressure placed on the services they rely on every day."

The council argues that national decisions are creating financial consequences for local authorities, leaving them with growing responsibilities without sufficient resources to meet the costs.

Councillor Jane Davey, Cabinet Member for Finance and Property, said:

"The financial pressures facing local government are not theoretical. They are real, growing and increasingly difficult to manage through local efficiencies alone.

"We are asking Government to work with councils to deliver sustainable solutions so that residents can continue to receive the services they need both now and in the future."

Children's services remain a particular concern, with the authority calling for greater certainty around the future funding of special educational needs provision.

Councillor Sam Raby, Cabinet Member for Children, Young People and Learning Services, said:

“Children and young people must remain at the heart of this debate. This council has demonstrated its commitment to improving outcomes for children and families in West Sussex, but lasting progress will require national action and a funding system that is fit for purpose.

"We are pleased our SEND Reform Plan has been accepted by government and that we will be paid our grant of around £183m. However, this currently leaves a 10% shortfall in the Dedicated Schools Grant of around £50m, which is still a significant financial burden for us.”

In his correspondence with ministers, Councillor Mercer has urged the government to reconsider the impact of its Fair Funding Review and ensure councils receive sufficient financial support to manage local government reorganisation.

He has also called for the government to fully cover the costs of supporting unaccompanied asylum-seeking children, provide clarity over SEND deficits and accelerate proposed reforms.

The council says that without a more sustainable financial settlement, local taxpayers could face increasing pressure while services become more difficult to maintain.

The government has been approached for a response to the council's concerns.

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