The LGA's Autumn Budget submission warns the UK cannot deliver growth, reform public services or improve life chances without fixing local government finances.
Cllr Louise Gittins, LGA chair, said: ‘Council costs and demand for services are soaring – especially in children's and adult social care, homelessness, and SEND home to school transport – leaving significant potential overspends this year.
‘The consequences are visible everywhere. Fewer neighbourhood services, reduced investment in prevention and growing pressure on those who rely most on local support.'
Between 2022/23 and 2024/25, councils overspent by an average of 5.2% on adult social care, 14.2% on children's social care, 25.1% on home-to-school transport for children with SEND and 51.9% on homelessness.
Planned budgets for 2025/26 show further steep rises – 9% for adult social care, 10% for children's social care and 39% for homelessness.
The LGA called on the chancellor to: provide councils with a significant boost in resources to prevent widespread financial failure and empower councils to unleash growth and service reform at scale; write-off the £5bn SEND deficit; and ensure robust transitional arrangements are put in place to protect councils from both cash-terms and real-terms cuts where necessary.