Over half of English councils face insolvency under £5bn deficit, MPs warn

Public accounts committee calls on government to urgently address deficit on high needs spending hitting at end of financial year

Councils in England face being overwhelmed by billions of pounds in debts and reforms that are divorced from reality, according to an influential committee of MPs.

In its inquiry into local government finances, the public accounts committee (PAC) told the Treasury and other departments to urgently address the estimated 5bn deficit on high needs spending - mainly on special educational needs - that will hit council balance sheets at the end of the financial year, potentially driving many insolvent.