District councils seek extra funding in Budget to fill staffing gaps

New evidence has emerged of how cash-strapped councils are struggling to recruit and retain staff, leading to a warning that key services are being paralysed.

Research by the District Councils’ Network (DCN) reveals planning departments have the worst workforce shortages, with no fewer than 84% of them experiencing recruitment and retention issues linked to councils’ ongoing financial stress.

This has led to concerns that there will be too few planners to guide the housebuilding boom sought by ministers. There are also fears that less planning expertise could open the door to suboptimal developments which do not result in pleasant, safe and environmentally sound communities that meet future local needs.

Building control and housing services are other areas of councils’ work which contribute to new homes but are experiencing significant personnel shortages, according to DCN’s survey. In nearly a third of councils’, teams trying to prevent homelessness – work which reduces the burden of other parts of the public sector including the NHS – also experienced shortages.

And councils’ ability to undertake their basic functions is also reduced. Staff have been leaving the sector for years and DCN member councils also face workforce shortages in finance and legal services departments, which are essential to ensure services operate affordably and legally.

The scale of extra spending caused by wage increases is also revealed by DCN’s research. DCN’s 169 member councils on average had to budget an additional £881,000 each in extra pay for 2024-25 – an increase in 5.2% across the district council sector as a whole. They have budgeted for further rises of 3.3% in 2025-26 and 3.1% in 2026-27.

This contributes to continuing financial strains. Four-fifths of the councils that completed DCN’s survey project a budget shortfall in 2025-26, averaging about 7% of revenue budgets. The figure for 2026-27 is even higher with the shortfall representing 11% of revenue budgets.

Cllr Jeremy Newmark, DCN’s finance spokesperson, said: “For too many years councils’ funding has either fallen or failed to keep pace with demand for services and we seek urgent support from the Government in the Budget to ease difficulties which impact gravely upon our valued staff.

“As councils have had no option to make cuts and services become increasingly threadbare, the burden on their remaining staff grows and the danger is that careers here become less attractive.

“Local government is about place leadership and driving change in communities and it should offer prospective staff a rewarding career – but at the end of the day unless we get adequate funding that allows departments to function properly and staff to be paid fairly we will see more of our workforce leave to more lucrative roles elsewhere.

“Local services and national policy goals depend on properly functioning councils – but deepening shortages of finance officers and lawyers have the potential to paralyse councils, or even lead to their collapse. It’s in the Treasury’s interest to act now to ward off far worse problems later.”

Cllr Richard Wright, DCN’s planning and growth spokesperson, said: “Councils are essential partners for the Government to achieve its national mission of driving growth and new homes – but we need to enhance and retain local expertise to do this successfully.

“Planning departments have been among the most impacted in recent years as shrinking budgets have forced councils to reduce spending but if the Government’s housebuilding revolution is to succeed we need a step change in the recruitment and retention of planners.

“Properly resourced planners can help ensure the Government’s housebuilding plans will bring about hundreds of sustainable and well-sited new communities that provide housing which will stand the test of time. With degraded planning expertise, we risk building housing in isolated locations which are beset by social problems, and in which no one wants to live.

“So I urge the Treasury to properly resource planning authorities if it wants the Government to achieve its most fundamental goal of ending the housing crisis.”

DCN’s Prospectus sets out a series of recommendations for how district councils’ funding can be made more sustainable. Among the measures we seek are greater local flexibility to set council tax increases and giving councils the freedom to set planning fees at a level that reflects the service’s costs. This latter measure has previously been consulted on – but never implemented by the Government.

Background information:

DCN represents 169 councils, including all of England’s 164 district councils – the most localised principal authorities. Eighty councils responded to DCN’s finance survey.

The percentage of respondent councils which said each of the following service areas suffered recruitment and retention difficulties was: