22-09-2025
Social care demand pressures, unsustainable borrowing and weak governance of commercial ventures are common and recurring risks at councils reliant on Exceptional Financial Support (EFS), a CIPFA study has revealed.
With almost one in ten English councils now in receipt of EFS, CIPFA analysed findings from assurance reviews it carried out at 12 of the 19 councils granted EFS in 2024/25. The institute is highlighting both recurring risks alongside identifying some common pathways to recovery.
The EFS granted to these 12 councils in 2024-25 covers more than a third (£561m) of the £1.5bn in support allocated by central government in the last financial year. The assurance reviews were commissioned by the Ministry of Housing, Communities and Local Government (MHCLG) to provide assurance on the appropriate use of EFS.
CIPFA’s analysis finds that ten out of 12 of councils reviewed face major planning and strategic challenges, often linked to under-developed transformation programmes but in some cases, weaknesses in some fundamental monitoring and reporting process. Two-thirds are struggling with capacity, skills and knowledge gaps and almost three in five have failed to deliver sufficient savings. Critically low reserves are also a problem for five out of 12 of the councils.
While the causes of financial stress vary across the cohort, recurring risks include demand pressures in children’s and adult social care, unsustainable borrowing levels, weak governance of commercial ventures and delays or political obstacles in disposing of assets or decision making.
Critically, the report identifies common risks across the 12 councils summarising risks and recommendations in the context of the broader sector. The report allows councils and indeed other public bodies across the UK to learn from CIPFA’s insights and consider whether some of the risks and recommendations could be relevant to them.
CIPFA Senior Policy Manager Joanne Pitt, said:
“The public sector has always valued shared learning, and this report builds on that ethos by highlighting the lessons from these reviews. While every organisation is unique, there are clear common themes, and capturing these is essential for future planning across the sector.
CIPFA Managing Consultant, Simon Allsop, said:
“We are committed to supporting councils and other public bodies in developing practical approaches to deal with uncertainty and the financial and resource pressures they are facing. At a time of unparallel competing demands on the sector and its professionals, our assurance reviews highlight approaches that build resilience and help address risks.”
CIPFA’s recommendations include strengthening medium-term financial planning, ensuring savings plans are realistic and deliverable, investing in targeted finance training for members and officers and bolstering governance with independent audit committee members. The institute also advises on the importance of robust scenario planning, careful monitoring of reserves and more strategic management of assets and commercial ventures.
Notes to editor
- EFS is a form of emergency support from central government, allowing councils to use capital resources or borrowing to cover day-to-day spending.
- In 2024-25, 19 councils received EFS; CIPFA reviewed 12 of them.
- In 2025-26, 30 out of 317 English councils are in receipt of EFS, almost one third of all upper and lower tier councils in England.
- Councils reviewed by CIPFA: Bradford, Cheshire East, Cumberland, Eastbourne, Havering, Medway, Middlesbrough, Plymouth, Somerset, Southampton and Stoke-on-Trent.
- Download the assurance reviews summary