GUIDE: Local councils in crisis and how Westminster intervenes

As the UK Government sets out to reform the local government sector again, this is a clear guide to the mess that English councils currently find themselves in. It focuses on how the government is intervening in failing authorities. In our guide you will find a breakdown of how councils are supposed to function, how they got into this crisis, how the government is currently intervening, and tips for getting more involved yourself.

Sections 1 and 2 set the scene and give some political analysis of where local government is right now
Section 3 outlines the nuts and bolts of local government in England with the key players both in and outside the council
Section 4 talks specifically about interventions – when Westminster takes decisions about how specific councils should operate
Section 5 outlines some ways you can play a part (whether as a person living in a council under intervention, a journalist or part of a campaign group)
Section 6 is a glossary – if there are any terms you don’t understand, this is where to go

We have published it as both a webpage and a PDF – you can see it above or keep scrolling to read it as a webpage with embedded links. You can use the sections as standalone resources, or read the whole guide.

Note on terminology: Unless otherwise indicated, ‘government’ means the UK Government, sitting in Westminster. Local government is referred to as such, or as ‘councils’ or ‘local authorities’.

This guide is accurate in July 2025. We have republished it with 2 minor corrections .

1. Introduction

‘Local government is in crisis’ is a phrase we hear daily. This crisis manifests in so many ways: councils are struggling to find the money for special needs education; the need for and cost of social care is spiralling; bin collections are getting rarer. An increasing number of councils are now saying they simply haven’t got the money for their legal duties. Some of those are receiving extra financial support from the government, while others have issued a ‘Section 114 notice’ to effectively declare bankruptcy.

But what does that mean, and who decides what happens? Few of us really understand the bigger picture beyond headlines. Research for Action has embarked on a project to explore how the government is intervening in struggling councils and what the implications are. Often councils have no say in these interventions, which has significant implications for our democracy.

Westminster is currently intervening in several councils in financial crisis and providing extra financial support to many more. But these are not simply financial crises. Often they are partly or wholly the result of politicised decision-making, both in the councils and in Westminster. Financial crises are also more visible because they are measurable, in a way that processes, skills and cultures are not. In other words, while it is often easy to see a balance sheet that doesn’t add up, it is sometimes less obvious when governance and democratic processes are impaired or lacking.

We also believe that there are structural reasons (for example, long-term austerity and frequent restructuring) for why local government is politically irrelevant to most people and indeed set up to fail them. When discussing these issues, we want to make sure that the apparently neutral terms that are used (for example ‘best value’) are called into question. Citizens are well-placed to do this, even though critical challenge to the norms can require strength and patience!

Publishing this guide is part of our research, where we share what we have learned so far and offer this guide so we can all understand better what is happening. Understanding what is going on is important, but also remember – you don’t have to understand everything to make your voice heard, ask questions or make a difference.

2. How did we get into this mess?

There has been a startling increase in councils declaring themselves at risk of bankruptcy (issuing a ‘Section 114’ notice) in recent years. This rarely happened before 2018, but there have been 13 issued since then, with many more authorities warning they might follow suit.

Additionally, in the year 2025/26, 29 councils are relying on ‘exceptional financial support’ from the government to balance their budgets. These measures often come with a reduction in spending for vital services and – in some cases – different types of central government intervention. Yet the crisis goes beyond individual authorities: the majority of councils are having to use their reserves to cover day-to-day spending and in February 2025 almost half of councils in England were at risk of falling into bankruptcy without action to address the predicted £4.6bn deficit in special educational needs funding. This has built up as party of temporary statutory override agreements with the government that has now been extended to March 2028 amid promised reforms to the system.

This change is not sudden: it has deep roots. There has been a hollowing out of local government due to decades of funding cuts, privatisation and centralisation of power away from the local area. Despite this background of 50 years of policy decisions, the indisputable trigger to the current situation is austerity. Between 2010-11 and 2015-16, councils’ spending power from government funding was reduced by 39%. Although funding has somewhat increased since then, many councils who have already made efficiency savings are still having to cut their spending every year to balance their budgets amid rising demand for services.

Underpinning this has been a wholesale change in how local government is financed: predictable central government support has been replaced by piecemeal funding for different struggling areas, such as extra funding for Special Educational Needs (SEND) or temporary accommodation. This trend was introduced through Covid support grants, which at least ended the freefall in councils’ funding. Beyond these short-term measures, councils are expected to finance themselves through council tax and business rates as well as fees and fines. Council tax accounts for around half of local authorities’ income; but is based on house prices from 1991, which often doesn’t mean that those who can pay more do pay more. Shifting the responsibility for raising more of their income has also obscured the responsibility for austerity.

Councils have increasingly been pushed to borrow and make risky investments in order to pay for day-to-day services. They have become commercialised actors in a financial economy: they are encouraged to borrow from capital markets, hedge against risk, invest in speculative commercial property and enter into public-private-partnerships. Well-known examples of these arrangements include Private Finance Initiative (PFI) contracts and LOBO loans that have left councils with millions to pay off each year. And in some cases, risky investments have led to some councils falling into huge debt, including Woking and Thurrock where the government has had to step in.

Even though individual councils have made poor decisions (often clearly not in the public interest, for example in ill-judged investments in Thurrock), the structural causes of the current financial crisis outlined above have all been centrally driven. This is symptomatic of another key feature of the UK local government: it is very centralised. Councils raise only 5% of all taxes in the UK compared to 14% in France and 35% in Sweden. Population size per authority varies wildly but is generally very large compared to European average. This is a result of the previous major restructuring of local government: The Local Government Act 1972 streamlined an existing but poorly-organised two-tier system, reducing the number of authorities from 1,245 to 412. This, coupled with a parliamentary system where any powers local or devolved governments have are expressly granted in legislation, makes it very easy for central government to change and very hard for local government itself to drive any reforms.

The government is about to embark on English devolution reforms that will give greater powers to newly-created regional combined authorities and reorganise local government so that all councils are single-tier authorities of similar sizes. In effect, this abolishes the two-tier system of district and county councils. While councils work on exactly how they will reorganise themselves into this new system, it remains to be seen how these sweeping reforms will impact accountability structures and local democracy; some researchers have noted there is little evidence for these reforms bringing greater efficiency.

At a time when council budgets are more squeezed than ever and the structure of local government is in flux, oversight over finances should be even more important than usual. But in reality the system is not fit for purpose. Some councils have not had their accounts audited for up to five years, and so few councils submitted reliable financial data in 2024/25 that the National Audit Office took the unprecedented move of refusing to sign off the Whole of Government Accounts. The government is about to enact reforms to the broken local audit system and create a new Local Audit Office, but the impact of this won’t become clear for a few years yet.

In the eight years we have spent exploring local authority finances, accountability and audit, the crisis in the sector has intensified. Yet this is still an under-researched area; in particular the effects of austerity and financial mismanagement need to be better understood. The main analysis of ‘council failure’ frames it as either a purely technocratic issue (not enough resource) or a purely political one (bad decisions, poor governance, wrong policy decisions). This binary serves party politics and media soundbites but cannot properly illuminate the causes of these crises or the responses to them. We want to move away from entrenched narratives, explore what is happening in the sector and disseminate that information so that the public, journalists and other civil society actors can better understand and scrutinise councils and challenge government interventions.

3. How does local government actually work?

Local authority structures

Different types of local authority

In England, there are 317 local authorities; they currently vary in type, size and how they are governed.

In many English areas, there are two tiers of local government: county councils and district councils. County councils are responsible for county-wide services like education, transport, planning and social care, whereas district councils (including borough and city councils), run services like rubbish collection, recycling and housing. The rest of councils in England are single-tiered unitary authorities, including metropolitan boroughs, London boroughs, and the Isles of Scilly. They provide all council services.

The number of unitary authorities has grown since the 1990s; today there are 62. At the time of writing, this is about to become the only model for local councils in England. In 2024, the government announced its plans for English devolution, which will include reorganising two-tiered councils. The idea is to improve efficiency and financial resilience by creating unitary councils across the country, with a target population of about 500,000, meaning smaller councils will have to merge.

Internationally, tiered systems of local government are common, whereas English councils have since the 1970s grown in size and have on average far larger populations than European countries. There has also been a reduction in the number of councillors due to these reorganisations of local government.

The latest type of authority to be established in England is a combined authority. It is a regional body that enables two or more councils to collaborate across their boundaries. They are made up of existing councillors, but most have directly elected mayors. These are often called ‘metro mayors’. There are now 16 of these, including London, with deals agreed in February 2025 for six more areas that will elect their first metro mayors in 2026.

Although combined authorities are often talked about in terms of ‘devolution’, contrary to the devolved parliaments and assemblies in Wales, Scotland and Northern Ireland, they do not have political autonomy or fiscal freedoms.

But this is about to change. As mentioned, in the English Devolution White Paper, the government unveiled plans to create combined authorities across the country, rebrand them as ‘strategic authorities’, and hand them varying levels of power and autonomy if they meet certain criteria, such as having a regional mayor. Regions that already have combined authorities, such as Greater Manchester, will be the first to be given extra powers, including ‘integrated settlements’ – meaning that for the first time Mayors are not bound by strict Westminster rules over how to spend money locally.

How councils are structured

Returning to council level, there are different governance structures that councils can choose, including:

a leader and cabinet (also called the executive)
a committee system
executive arrangements with a directly elected mayor
other arrangements ordered by the Secretary of State.

In a leader and cabinet model, all the councillors elect a leader, who then appoints and chairs the cabinet. Each cabinet member has a specific area of responsibility.

In a directly-elected mayor model, the mayor has greater powers than the council leader, including proposing the budget and policy framework. They appoint and chair the cabinet.

In a committee system, the council has a number of policy committees that each have a specific area of responsibility. The members are appointed from all political groups, so more councillors are involved in decision-making.

In 2000, the Labour government under Tony Blair introduced the leader and cabinet model and directly elected mayors. Although a handful of English local authorities have had directly-elected mayors, it is not universally popular; a number of councils have recently voted in referendums to scrap their mayors and move to a committee system. But in June 2025, the government announced that the committee system will be abolished and councils will have to move to a leader and cabinet model.

Councils without a committee system must create overview and scrutiny arrangements where non-cabinet councillors can scrutinise decisions. Whichever governance model an authority opts for, it must have a Full Council: a decision-making body where all councillors sit. This is responsible for major decisions, as well as an important forum for debate on local issues. Councils also have to have licensing and planning committees.

Also introduced in 2000, overview and scrutiny committees are intended to ensure that councillors who were not part of the executive could hold it to account. Councils with a committee model of governance are not required to have overview and scrutiny committees but can opt to do so.

What about the money?

Councils are legally required to set a balanced budget each year, which means they can’t spend more money than they receive. They must issue a Section 114 notice if this is at risk. Council budgets generally have two categories: revenue (recurring spending each year on services) and capital (one-off spending, such as building new homes). In recent years, a growing number of councils have received Exceptional Financial Support, which allows them to ease pressures on their revenue budgets using capital receipts from selling assets or borrowing. Councils also have reserves to protect them from financial shocks.

Councils are legally required to provide certain services (known as ‘statutory services’), such as social care or homelessness prevention. Other services have been cut to help balance the budgets, such as libraries, public toilets and youth centres.

The financial year runs from April to March. Local councils usually vote on their budgets for the upcoming year in February, after the government announces the provisional Local Government Financial Settlement. Councils then have to publish their accounts by 30th June, which can then be inspected by the public for a 30-working day period, and are supposed to be audited by the end of September. In practice though, internal audits have been in freefall for some years, and 75% of councils do not have up-to-date audited accounts to work from.

The key players

People in the council

Councillors: After being elected to represent a local ward, councillors vote on key decisions like the annual budget. They can scrutinise what the council is doing, ask questions and criticise or defend council decisions to the media. They might also have more of a say on a particular area of the council, if they sit on a committee or have a cabinet position, which depends on what model the council has.

Council leader: Most councils have a leader and cabinet model, where the leader is the most important councillor and usually comes from the party or group with the largest number of councillors. They are responsible for setting the council’s strategic direction, giving areas of responsibility to other councillors via posts in their cabinet, and representing the council on external bodies regionally and nationally. Some councils have a committee model, where some of the leader’s power is handed down to chairs of different committees.

Mayors: Instead of a council leader, a handful of councils are led by a mayor, who is directly elected by the people and wields more power. These are not to be confused with regional mayors, also known as Metro Mayors, who are in charge of regional combined authorities that cover multiple council areas. These metro mayors are fairly new, but are set to become much more important as part of plans to increase devolution across England by setting up more of these regional combined authorities and handing more powers to their leaders.

Cabinet members/Committee chairs: Some councils have a cabinet – a group of councillors specifically tasked with making the final decisions over areas like housing or transport. They determine strategy and policy together with the leader and are held accountable over their area of responsibility by local media and citizens. At councils with a committee system, instead of a cabinet, power is given to the chairs of policy committees, but other councillors on those committees from different parties also have a say. Who becomes committee chairs is based on how many councillors each party has.

Chair of Audit Committee: A councillor is chosen to be the chair of the Audit Committee, which scrutinises the inner workings of the council, from risk management and audit processes to their annual accounts and other financial reporting. By law, councils have to meet lots of different legal duties, standards and regulations, and Audit Committees are tasked with monitoring that and flagging up when the council isn’t doing everything it needs to.

Chair of Overview and Scrutiny Committee: A councillor is chosen to be the chair of the Scrutiny Committee, which is one of the main ways that the council is held to account. The committee is tasked with monitoring the council’s performance against its goals, interrogating decisions and policies, and making recommendations for action, although how effective these committees are does vary from council to council. Overview and Scrutiny Committees also have the power to ‘call in’ decisions made by the council, requiring members of the executive or officers to appear before them, but the committee can’t compel the council to take certain action. In practice, councils have vastly differing ways of handling audit and scrutiny functions – there seems to be almost as wide a range of approaches as councils.

As well as elected politicians, there are key players in local government who are employed by the council. The three statutory (meaning compulsory or official) roles are:

Head of Paid Service: This is the proper title of the most important statutory (necessary) person in the Council – confusingly, the Head of Paid Service is usually the Chief Executive, but formally need not be so. The legal duty is (at all times) to have a council officer appointed as the Head of Paid Services, but they need not necessarily be the Chief Executive.
Chief Executive of Council: This is the most important operational person in the council Executive, which means the people who are employed and not politicians (a bit like the civil service). The Chief Executive is responsible for making sure the council runs smoothly, managing the council’s workforce and implementing the decisions made by the politicians.
Section 151 Officer: Also known as the Chief Financial Officer, the Section 151 officer is responsible for making sure the council is complying with all of its legal obligations relating to financial management. Not only are they the most senior financial advisor to the wider council leadership on its financial plans, they are also legally required to issue a Section 114 notice if the council’s spending is likely to exceed its income in a given financial year.
Monitoring Officer: Like the Section 151 officer, the monitoring officer’s job is a legally binding governance oversight role in which they must make sure the council is meeting all its legal obligations. They then investigate and report where the law has been broken or is about to be broken (sometimes they are also the head of Legal Services in the council). Another important aspect of their role is responding to complaints from the Local Government Ombudsman. Members of the public can submit Public Questions to the Monitoring Officer to find out more about council decision-making (example guidance here). Monitoring Officers do not currently have to belong to an official association or regulatory body.

External people and organisations supporting and scrutinising local councils

External Auditors: Council accounts must be audited once a year by external auditors, who are currently private sector companies. They can commission extra investigations into the council, for example a Public Interest Report, but they have little incentive to dig deeper into problems and they rarely do this. There is little or no oversight of the audit sector from any public body since the Audit Commission was abolished in 2015. This sector is in a real mess, with a huge backlog in audited accounts meaning that there are councils who haven’t had their accounts audited in three or four years, which is especially concerning given the current financial crisis councils are in. The government is planning legislation to reform local government audit in 2025.

Ministry of Housing, Communities and Local Government: The government has the power to inspect and intervene when local councils aren’t doing everything they need to under the Best Value Duty – although as mentioned, this is a problematic concept that emphasises efficiency over public interest. Intervention can vary from more light touch support packages like setting up improvement boards to sending in commissioners to take over and whip the authority into shape. In recent years, dozens of councils have applied for ‘exceptional financial support’ from the government, and many are currently relying on a temporary ability to have a deficit in their education spending until March 2028.

Commissioners: When the government intervenes in a council in crisis, Commissioners are appointed by the Secretary of State to scrutinise work the council is doing to improve, and report back on what progress has or hasn’t been made, usually every six months. But Commissioners are also given the powers to take over crucial council functions if necessary, such as governance, finance and recruitment. It is up to them how much they use these powers. Some councils (e.g. Woking, Thurrock and Slough) have had Managing Director Commissioners appointed by the government. This is the strongest form of intervention, as they fulfil the role of Chief Executive. Often Commissioners are ex-Chief Executives of other councils, or experienced local politicians. Their fees are set by the Secretary of State and paid by the council under intervention, so are an additional cost for the council.

Ministerial Envoys: Introduced by the new Labour government in 2024, these are being presented as light-touch Commissioners, acting as ‘advisors, mentors and monitors’ to the council. However, if we read their roles and remits in specific interventions, it seems Envoys can take similar powers of control to Commissioners if they wish to. At the time of writing it is yet to be seen if Ministerial Envoys are actually any different from Commissioners in practice. It seems likely that the differences are actually slight and the larger differences are between different interventions in different places rather than between Envoy and Commissioner powers as such.

Local Government Association: The LGA is the national membership body for local authorities. It makes the case for why local government matters and campaigns for reforms and extra funding from central government. It also offers a range of practical support to individual councils looking to improve their organisation and delivery of services, including peer support programmes.

CIPFA: The Chartered Institute for Public Finance and Accountancy is the professional body for public finance and sets the standards that local authority finance officers must follow, including guidance on budgeting, governance, and financial reporting. It plays a key role in local government by supporting Section 151 officers and scrutinising councils at the government’s request.

The Local Government Ombudsman: Councils deliver a range of frontline services, from social care to collecting your bins and working out your council tax bill, and members of the public can make complaints if the service wasn’t up to scratch. They can choose to escalate their complaint to the Ombudsman, who will investigate and make a ruling on whether the council acted appropriately or not. They also draw themes from individual cases and release reports about failings in this local government sector.

The public: The general public has the ability to vote for their local councillor or city mayor, ask questions at council meetings and even inspect the council’s annual accounts. The extent councils engage with the public when making decisions or shaping future policy is variable, from tick box consultations to genuine listening and partnership building. For more on this citizen power, see the section on how you can do to get involved.

Campaign groups and community groups: Like any member of the public, campaign groups can raise issues with individual councillors or make their point at Full Council or Committee meetings. They can request information held by the council through the Freedom of Information Act.

Local media: Although the local media sector has been hollowed out in the internet age, leaving some council areas with little or no media coverage, there are still some journalists covering what councils are doing. Media coverage of local councils received a much-needed boost in 2018, when the BBC launched the Local Democracy Reporting Scheme, paying the salaries of hundreds of local reporters placed at local papers up and down the country, whose sole job is to report on council meetings. Some councils face extra scrutiny from small independent media outlets and citizen journalists doing it just for love of the game.

Trade Unions: Councils have large workforces and so will often have multiple trade union branches – usually UNISON, Unite or GMB. There is also ALACE, the trade union for local authority chief executives and senior managers. As well as employing thousands of people directly across different services, councils also commission lots of services delivered by NHS, third-sector or private sector organisations. When councils are being forced to save cash, trade unions often get involved when planned cuts to a council service affect the staff working in it.

MPs: MPs represent constituencies, some of which have multiple local authorities within them. Often MPs have experience of working in councils, usually as councillors. MPs can continue to sit as councillors when they are elected to Parliament, thus performing both roles. In Parliament, MPs can ask questions about relevant policy, write and scrutinise new laws, sit on committees investigating specific issues and make recommendations to the government.

4. How does the government intervene in local councils?

The UK Government has the power to intervene in local authorities in England due to various legal powers, chiefly those in the Local Government Acts of 1999 and 2000. In certain circumstances in England, the relevant Secretary of State (currently Housing, Communities and Local Government) can appoint Commissioners to effectively take control of any part or all of the council. The Welsh Government has similar powers, but crucially this devolved government cannot force a council to accept help. Local government is structured differently in Scotland and Northern Ireland and most legislation we are talking about here only applies to England and Wales.

Interventions can be either statutory or non-statutory. Non-statutory interventions are often put in place to try and prevent a larger problem before it happens, whereas statutory interventions are historically considered a ‘last resort’ by the government. (For a list of these interventions and what they all mean, see Glossary)

In England, the power to intervene on a statutory basis is derived from the concept of a ‘Best Value Duty’. The Best Value requirement is that a local authority should be able to demonstrate that it is ‘making arrangements that are economic, efficient and effective and that it has regard to the need to secure continuous improvement in how it carries out its work.’ However, we must ask what these terms mean in a context of continued and ongoing cuts to resources. At the same time, the use of ‘continuous improvement’ as a measure implies that a local authority can always improve and – more importantly – can always be sanctioned for not doing so.

An intervention can be triggered by serious shortcomings in a particular area or service, but the recent ones are mostly linked to the councils being in financial jeopardy.

How common are interventions?

Between 2000 and 2018, very few councils were placed under intervention, but there has been a flurry in recent years in England. By contrast, in Wales (where a devolved government was created in 1999), there has only been one intervention in its 22 local authorities – Anglesey Council, between 2009 and 2013.

At the time of writing (1st July 2025), there were eight ongoing statutory interventions in local councils in England: Birmingham, Croydon, Nottingham, Slough, Thurrock, Woking, Tower Hamlets and Spelthorne, as well as an inspection underway in Warrington. There have been previous statutory interventions in Doncaster, Liverpool, Northamptonshire, Rotherham, Sandwell and Tower Hamlets.

There are currently three active Best Value Notices (BVNs) issued by the government, to Cheshire East Council, Newham Council and Tees Valley Combined Authority. These act as a kind of warning that may precede an intervention if improvements aren’t made. There are a further eight authorities that have had BVNs lifted in recent years: West of England Combined Authority, Bradford Council, Eastleigh Council, Runnymede Council, South Cambridgeshire Council, Cambridgeshire and Peterborough Combined Authority, Middlesbrough Council, and Bournemouth, Christchurch and Poole Council.

NOTE: As this is a rapidly-changing picture, please refer to the latest news on interventions through the Government publications on local councils.

What makes an intervention likely?

There are multiple things to look at to indicate a council may be at risk of having an intervention. These are basically the same things we would look for to indicate that there are financial and/or governance issues in the council. These are four key aspects of local governance which indicate likely governance and/or financial problems:

Problems servicing debt (a clue is very high borrowing-to-income ratios)
Low reserves
Overspending on specific major projects (e.g sport/entertainment venue)
Unstable leadership (e.g. lots of personnel changes in short time period)

(Source: Local Government Information Unit)

You can find out more about how to read your council’s accounts in our guide, published here.

What happens in an intervention?

Timeline of interventions: June 2025

How it starts, and non-statutory interventions

An intervention will begin after concerns are raised about a specific council. Prior to 2015, these concerns would often come as an Audit Commission report, but since the abolition of the Audit Commission, the system of communication and oversight is more fragmented. The government can commission a Best Value Inspection or External Assurance Review to investigate concerns about how well the council is being run.

When concerns are communicated to the relevant Secretary of State, there are a number of ways that the council can be supported by the government to improve – usually through the Local Government Association in the first instance. These are known as non-statutory interventions.

One type of non-statutory intervention is the appointment of an Improvement Board made up of individuals with skills and experience to support, advise and challenge the authority. This has happened in Croydon and Nottingham. However, in both cases, progress wasn’t deemed sufficient so the interventions were upgraded to a statutory footing.

What is a statutory intervention?

In England, the government will announce its intention to intervene in the local authority, which has 21 days to formally respond. The government will then issue directions, which are the formal terms of the intervention, and typically include the appointment of commissioners or some kind of improvement board to oversee the council’s transformation.

The intervention will last a number of years, and can be both altered and extended by the Secretary of State. Different parts of the council may be ‘handed back’ to council control at different stages.

The Commissioners scrutinise work the council is doing to improve, and report back on what progress has or hasn’t been made every six months. Commissioners are also given the powers to take over crucial council functions if necessary, such as governance, finance and recruitment. It is up to them how much they use these powers. In a recent intervention in Tower Hamlets, the government has used Ministerial Envoys instead of Commissioners. They don’t have the power to take over council functions.

What are the effects of an intervention?

In practical terms, statutory interventions can have a huge effect on a council or part of a council. There tends to be a lot of information-gathering and reporting during the early period of an intervention, followed by changes in culture, personnel, and governance structures.

Commissioners work alongside the council’s key executive figures to contribute and exert control over specific aspects of council business.

Common changes under commissioners include: budget cuts, selling off assets and commercial investments, hiring and firing senior officers, introducing new processes to improve financial governance, and restructuring the operating model of the council, including cutting the number of officers. This is done through some kind of improvement plan. There is always some kind of board and panel that the commissioners sit on, but the transparency of this varies. They don’t always meet in public, and they sometimes publish minutes, but only months after the fact.

The commissioners are sometimes controversial figures, especially as the councils are forced to pay their salaries, which are often around £1,000 a day. Even though they are the democratically-elected portion of the council, councillors can be sidelined during an intervention.

For the intervention to come to an end, the government has to be satisfied that the council is meeting the Best Value Duty, although this doesn’t necessarily mean the council is acting in the public interest or delivering the best services for its residents.

5. How can the public play a role?

There are many ways in which you as a local resident can get involved in holding your local council to account beyond just voting in local elections.

Engage with council meetings by submitting questions, statements and petitions to Full Council. You can read some experiences and pointers specifically on public questions here.
Read transparency information, such as your council’s budget documents, papers from recent meetings, or its monthly log of spending over £500.
Contact your local councillor about the things you want to know more/ are concerned about.
Send a Freedom of Information request. This is an important tool used by journalists to acquire data and documents from public authorities, but members of the public can make them too. See WhatDoTheyKnow for more info.
Inspect your local council’s accounts during a 30-day period in June or July, which begins when the council publishes the draft accounts. The deadline for draft accounts in 2024/25 is 30th June 2025, though this can change slightly annually. You can request underlying invoices, contracts and documents and ask questions from the external auditor. If you find something in the accounts that constitutes irrational or potentially unlawful expenditure, residents can request a public interest report into the matter and/or apply to the high court to have the spending item declared unlawful. Read the full guide.
Complain about how the council has treated you. These complaints can also be escalated to the Local Government Ombudsman who can issue a judgement on whether the council has failed in its duties.
Challenge a council decision with a judicial review, where a judge assesses whether the local authority has acted unlawfully. However, the big drawback is that if you lose, you risk being liable to pay the authority’s legal costs, which could run into tens of thousands of pounds. Read more
Join or set up a campaign group. For example, the Save Birmingham campaign was set up to prevent a fire sale of community assets by both campaigning and proposing and supporting the establishment of alternative structures such as Community Asset Transfer.
Register a local building as an Asset of Community Value, which makes it easier for the community to take over the space if it’s put up for sale
Support local media. Some areas have hyperlocal or independent media that are covering councils with limited resources. If you don’t have an independent journal or blog, you could start your own!

6. GLOSSARY

Finance-related terminology

Budget

What the council plans to spend in one financial year.

Capital

One-off spending on future assets or infrastructure, such as buying properties, which is funded by government grants, capital receipts (sale of assets) and borrowing.

Revenue

Spending on recurring services like social care, which is funded by government grants and local taxes, and has to match income every financial year.

Reserves

Money the council has in the bank to help cover any extra costs or lost income, which can either be general or ring-fenced to specific areas of spending.

Local Government Financial Settlement

The annual allocation of funding for local authorities by the government, which is published in provisional form in December before the final version in the following February. From 2026/27, these settlements will start covering multiple years to make it easier for councils to plan ahead.

Crisis and interventions

Section 114

A legal notice issued by the Section 151 officer (the chief financial officer) stating that the council is unlikely to balance their budget in that financial year, or their general reserves aren’t enough to cover future costs. A S.114 notice, which is sometimes described as ‘effective bankruptcy’, pauses any new non-statutory council spending and forces the council to come up with a plan to address the issues.

Exceptional Financial Support (EFS)

A government scheme that has existed since 2020 where councils can request a capitalisation direction (see below) from the government to help balance their budget each year. Despite the name, EFS doesn’t mean councils are receiving any extra funding.

Capitalisation Direction

A form of financial support for councils from the government allowing authorities to reclassify revenue spending as capital spending, therefore allowing it to be funded by capital receipts and borrowing, which makes it easier to submit a balanced budget.

Statutory Override

A temporary arrangement until March 2028 allowing councils councils to have deficits in their SEND while they try to reduce them over time, in some cases with government support through Safety Valve programme, which provides extra funding for the 30 local authorities with the biggest deficits.

Intervention

Where the Secretary of State officially intervenes in a local authority, which can come in many forms (see below)

Best Value Duty (BVD)

This relates to the statutory requirement for local authorities and other public bodies in the Local Government Act 1999 to ‘make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness’. In practice, this covers issues such as how authorities exercise their functions to deliver a balanced budget, provide statutory services and secure value for money in all spending decisions. They must also demonstrate good governance, including a positive organisational culture across all their functions, and effective risk management.

Best Value Notice (BVN)

A senior civil servant, on behalf of the minister with responsibility for local government, writes formally to the Chief Executive of an authority to state the department’s concerns and set out the department’s expectations of the authority in providing assurance of progress. The authority may have to provide an improvement plan and regular updates on progress. The Notice will usually remain in place for 12 months, after which it may be reissued. It can be withdrawn or escalated at any time. To ensure the authority’s improvement work is transparent and open to external scrutiny, the department will publish Best Value Notices and will expect the authority to publish all related documents on its website.

Best Value Inspections

The Secretary of State has powers to appoint a person to carry out an inspection into an authority’s compliance with the Best Value Duty.

Statutory Interventions

Statutory directions under section 15 of the 1999 Local Govenrment Act can be made in relation to authorities where, from the available evidence, the Secretary of State is satisfied that the authority is failing to comply with the Best Value Duty. There are two main models of statutory intervention – either with directions to the authority only or commissioner-led with directions to the authority (see below). There will usually be an announcement that the Secretary of State is ‘minded to’ intervene, which allows for a period of representations from the authority and other interested parties on the reasoning and evidence behind the proposed intervention and on the proposed package itself. This process can however be bypassed in exceptional situations where there is sufficient urgency. If, after considering any representations received and all the relevant available evidence, the Secretary of State still considers that a statutory intervention is necessary, they will make Directions (subject to any amendments arising from representations received).

Statutory intervention (Directions only)

The Secretary of State directs an authority to take action to secure compliance with the Best Value Duty, eg. an improvement plan. They are time-limited and will automatically lapse unless further directions are issued. This is usually when failings are significant but not widespread and authority has capacity to take action but limited commitment to improve on its own.

Statutory intervention (Commissioners)

The Secretary of State appoints commissioners to take over an authority for a specified period until the authority is in a sustainable position to comply with the Best Value Duty. (For more on Commissioners, see ‘Key Actors’)

Non-statutory interventions

Measures to address failures or risk of failure before the Secretary of State decides to make a statutory intervention that can be initiated by the authority or the department. Examples include Improvement Boards and Sector-led Improvement.

Improvement Boards

An advisory board of individuals with skills and experience is set up to support, advise and challenge the authority, but without any statutory powers. Membership and terms of reference are usually set by the authority.

Sector Led Improvement

An authority is partnered with another authority with a good track record to play a supportive role. A supportive authority will be asked by the Secretary of State to assist, and the success of the local partnership and the authority’s improvement is set and monitored by the Secretary of State.

External Assurance Review

An independent review into the performance of a local authority commissioned by the government, which may be a requirement as part of an exceptional financial support package.

Other terms

PFI

This stands for Private Finance Initiative. PFI is a government procurement policy in which private firms are contracted to complete and manage public projects (often referred to as Private Public Partnerships, or PPP). Begun in 1992, PFI was phased out from October 2018 but as these are long-term projects, many are still running at the time of writing. PFI has been widely criticised as a way of keeping public spending ‘off the balance sheet’ and generating large profit for shareholders at the expense of the public.

LOBO Loans

All local governments borrow money for their work, and they can either borrow from the central government or private sector. LOBOs (Lender Option Borrower Option) loans are expensive, long-term and high-risk bank loans that local councils have taken out, leading to very high interest payments. For more, see some of our previous research here.

Local Audit Office

This is a proposed new body which the current government has indicated will oversee local government audits. It will partly replace the Audit Commission, abolished in 2015.

Written by FJ Malinen, Gloria Dawson and Matty Edwards

This version published July 2025