Survey by Local Government Association reveals low interest rates on cash deposits have hit council income hard
The property crash has deprived local councils of nearly £2.7bn of income over the last two years according to the Local Government Association.
The survey of 202 councils counted cash flow from sales of land, council buildings and other capital projects.
Combined with lower interest rates on councils' cash deposits, it means that councils are out of pocket to the tune of £4bn over two years, or £11m a day.
Sir Jeremy Beecham, vice-chairman of the LGA said town halls had been hit by a “perfect storm.”
“Sources of income have dropped sharply at a time when more and more people are turning to councils to help them through tough times.”
The survey also found that one in five councils is providing local people with help with their mortgage payments and half of all councils have set up or supported credit unions to help local people borrow money.