Council Faces £43m Shortfall as Government Funding Is Cut by Almost a Third

Westmorland and Furness Council is facing a £43 million funding shortfall as Government funding and grants are set to fall by almost a third, leaving council leaders facing further difficult decisions over spending and services.

Council leaders meeting in Kendal on Tuesday will be told by the council’s Section 151 financial officer that funding is expected to fall from £125.4 million in 2025/26 to £86.2 million by 2028/29.

The figures come as the council faces rising costs, increasing demand for social care and the need to find millions of pounds in additional savings to balance its budget.

The council’s financial gap could reach £51.1 million in 2028/29 before further savings are taken into account. Even after planned management savings, £38.4 million would remain to be found.

The challenge comes much sooner, with a projected £31.4 million gap in the 2027/28 budget. Planned management savings would reduce that to £18.3 million, but the council will still need to find ways to close the gap before setting a balanced budget.

Service reviews, recruitment controls and tighter spending on external services are already part of the council’s response. Further savings will be needed, and the financial outlook warns that workforce implications could follow as the authority looks at how it operates.

The council has yet to set out which services could be affected. Proposals affecting service users will be subject to consultation where required.

There is also limited scope to rely on reserves. The council expects to use £13.2 million during the current financial year, while its finance officers warn that reserves are limited and the General Fund is likely to be around its minimum level.

Rising costs are adding to the pressure. The 2026/27 staff pay award of 3.3% was higher than the 3% allowed for in the budget, while demand for adult and children’s social care continues to put pressure on spending.

A provisional budget is due to be considered in December, ahead of the proposed budget going before Cabinet in February.

The financial challenge means the council will need to make further decisions on where savings can be made as it attempts to balance its books against a backdrop of falling Government funding and rising costs.