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Over 40 Tory MPs have written to Rishi Sunak to demand extra funding for councils to avoid cuts to crucial frontline services.

Seven former cabinet ministers were among the signatories of the letter, which warned residents face a “double whammy” of reductions in services and higher council tax rates for local authorities to deliver a balanced budget.

Politics Live: Sunak accused of ‘disastrous failure’ on free childcare pledge

Struggling councils have repeatedly called on the government to provide emergency cash to protect provisions for local communities, as they have grappled with rampant inflation following a decade of significant funding reductions.

Last month ministers announced a £64bn provisional funding package, which, following a consultation, will be finalised in February with a vote in parliament.

However MPs who signed the letter, seen by Sky News, threatened to vote against the Local Government Settlement unless more cash is made available.

The MPs said they are “exceptionally concerned that without any additional investment, the overwhelming majority of upper-tier councils in our areas are planning service reductions and higher council tax in order that they can pass a balanced budget”.

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They added: “There is still an opportunity to rectify the situation and ensure MPs are able to support the vote on the Local Government Settlement within the House of Commons in early February.

“We would therefore urge you to do all you can to use the Final Local Government Finance Settlement to provide additional funding for local government to ensure that the councils in our areas can continue to provide the services that our residents depend upon on a regular basis.”

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Why are councils going bankrupt?
Councils ‘running out of road’ to bridge £4bn funding gap

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Nottingham council declares bankruptcy

Signatories of the letter include former local government secretaries Greg Clark and Robert Jenrick, former home secretary Dame Priti Patel, former Tory party chairman Sir Jake Berry, and chairman of the centrist One Nation caucus Damian Green.

It was signed by 44 Tory MPs in total, as well as as well as Labour’s Daniel Zeichner and Liberal Democrat Sarah Dyke.

It poses a fresh headache for embattled Mr Sunak, who has blamed previous cases of councils going bankrupt on the mismanagement of local Labour leaders.

The number of Tories who have signed the letter means the prime minister could find himself facing a significant Commons rebellion when it comes to a vote on the issue next month if more money isn’t provided.

The letter, organised by the County Councils Network, said county and unitary councils face a £650m overspend this year and a £4bn shortfall over the next three years.

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PM defends his position amid polls

They said there has been particular pressure on the cost of providing care for vulnerable adults and children and any extra funding should go towards this.

It is understood council leaders are lobbying the government for an extra £750m to help ease pressure over the next year.

Ben Bradley, the Mansfield MP and leader of Nottinghamshire county council, said “constructive” talks had been held with Downing Street on the issue.

However, with Chancellor Jeremy Hunt under pressure to cut taxes at the spring budget, it is unclear what fiscal headroom he will have to bail out struggling councils.

The first Office for Budget Responsibility forecast this week will provide clarity on how much money is available for spending and pre-election tax giveaways, which he has made clear are his priority.

The local government finance crisis has been highlighted by a string of section 114 notices, which effectively declare councils bankrupt.

Last year Nottingham Council and Birmingham City Council were among those to issue the notices.

Nearly one in five English councils are at risk of bankruptcy, according to the Local Government Association.

A Department for Levelling Up, Housing and Communities spokesperson said: “We recognise councils are facing challenges and that is why we have announced a £64bn funding package – a real terms increase at an average of 6.5% – to ensure they can continue making a difference, alongside our combined efforts to level up.

“We recently consulted on the final settlement for next year and are now considering the responses carefully.

“Councils are ultimately responsible for their own finances, but we remain ready to talk to any concerned about its financial position.”

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Trump renews push to oust Fed’s Cook ahead of expected rate cut

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Trump renews push to oust Fed’s Cook ahead of expected rate cut

Trump renews push to oust Fed’s Cook ahead of expected rate cut

US President Donald Trump has appealed the district court’s block on Fed Governor Lisa Cook’s removal, but new evidence has emerged.

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Bridget Phillipson calls for party unity as she launches deputy leadership bid

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Bridget Phillipson calls for party unity as she launches deputy leadership bid

And they’re off! Bridget Phillipson was first away in her two-horse race with Lucy Powell in the Labour deputy leadership stakes.

Facing a rival who was sacked from the government nine days earlier, the education secretary said the deputy leader should be a cabinet minister, as Angela Rayner was.

Launching her campaign at The Fire Station, a trendy music and entertainment venue in Sunderland, she also vowed to turn up the heat on Nigel Farage and Reform UK.

She also repeatedly called for party unity, at a time when Labour MPs are growing increasingly mutinous over Sir Keir Starmer’s dealings with sacked Washington ambassador Lord Mandelson.

Despite Ms Phillipson winning 175 nominations from Labour MPs to Ms Powell’s 117, bookmakers StarSports this weekend made Ms Powell 4/6 favourite with Ms Phillipson at 5/4.

But though the new deputy leader will not be deputy prime minister, a title that’s gone to David Lammy, Ms Phillipson praised the way Ms Rayner combined the two roles and rejected suggestions that as a cabinet minister she would be a part-time deputy leader.

Phillipson's deputy leadership rival Lucy Powell. Pic: Reuters
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Phillipson’s deputy leadership rival Lucy Powell. Pic: Reuters

“What can be achieved under a deputy leader with a seat at cabinet, just look at Angela Rayner,” Ms Phillipson told her enthusiastic supporters.

“Angela knew the importance of the role she had. There was nothing part-time about her deputy leadership.

“Last year I campaigned up and down the country to get Labour candidates elected – I’ve not stopped as education secretary – and I won’t stop as deputy leader.

“Because with local elections, and with elections in Wales and Scotland right around the corner, that role is going to be more important than ever.

“So that’s why, today, I pledge to continue Angela Rayner’s campaigning role as deputy leader.

“Continuing her mission to give members a strong voice at the cabinet table.

“Her ruthless focus on getting our candidates elected and re-elected, alongside her total determination to drive change from government. Because what mattered was not just what she believed, but that she could act on it.”

Read more
Analysis: Sacking Powell might haunt Starmer
Explainer: How does the deputy leadership contest work?

Ms Phillipson pledged to run a campaign of “hope, not grievance” and claimed the party descending into division would put the chances of children and families benefiting from Labour policies at risk.

But admitting Sir Keir Starmer’s government had made mistakes, she appealed to party members: “You can use this contest to look backward, to pass judgement on what has happened in the last year, or you can use it to shape positively what happens in the run-up to the next election.

“Back me so I can unite our party, deliver the change we want to see and beat Reform. Back me so together, we can deliver that second term of Labour government.”

Phillipson with Labour supporters at her campaign launch on Sunday. Pic: PA
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Phillipson with Labour supporters at her campaign launch on Sunday. Pic: PA

Starmer’s candidate vs Manchester mayor’s

As she did in a speech at the TUC conference last week, Ms Phillipson spoke about her upbringing “from a tough street of council houses in the North East all the way to the cabinet”.

At the TUC, she said she grew up – “just me and my mam” – and told how when she was nine, a man who’d burgled the house turned up at the front door with a baseball bat and threatened her mother.

Ms Powell, who enjoys the powerful backing of Labour’s ‘King of the North’ Andy Burnham, called this weekend for a change in culture in 10 Downing Street, with better decisions and fewer unforced errors.

His backing has led to the deputy contest being seen as a battle between Sir Keir’s candidate, Ms Phillipson, and that of the Greater Manchester mayor, seen increasingly as a leadership rival to the prime minister.

And like all the best horse races, with the betting currently so tight, when the result is declared on 25 October the result could be a photo-finish.

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Mandelson appointment was ‘worth the risk’ despite ‘strong relationship’ with Epstein, says minister

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Mandelson appointment was 'worth the risk' despite 'strong relationship' with Epstein, says minister

Appointing Lord Mandelson as the UK’s ambassador to the US was “worth the risk”, a minister has told Sky News.

Peter Kyle said the government put the Labour peer forward for the Washington role, despite knowing he had a “strong relationship” with convicted sex offender Jeffrey Epstein.

It is this relationship that led to Peter Mandelson being fired on Thursday by the prime minister.

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Lord Mandelson and Jeffrey Epstein. File pic
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Lord Mandelson and Jeffrey Epstein. File pic

But explaining the decision to appoint Lord Mandelson, Business Secretary Mr Kyle said: “The risk of appointing [him] knowing what was already public was worth the risk.

“Now, of course, we’ve seen the emails which were not published at the time, were not public and not even known about. And that has changed this situation.”

Speaking to Sunday Morning with Trevor Phillips, he rejected the suggestion that Lord Mandelson was appointed to Washington before security checks were completed.

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He explained there was a two-stage vetting process for Lord Mandelson before he took on the ambassador role.

The first was done by the Cabinet Office, while the second was a “political process where there were political conversations done in Number 10 about all the other aspects of an appointment”, he said.

This is an apparent reference to Sir Keir Starmer asking follow-up questions based on the information provided by the vetting.

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‘We knew it was a strong relationship’

These are believed to have included why Lord Mandelson continued contact with Epstein after he was convicted and why he was reported to have stayed in one of the paedophile financier’s homes while he was in prison.

Mr Kyle said: “Both of these things turned up information that was already public, and a decision was made based on Peter’s singular talents in this area, that the risk of appointing knowing what was already public was worth the risk.”

Mr Kyle also pointed to some of the government’s achievements under Lord Mandelson, such as the UK becoming the first country to sign a trade deal with the US, and President Donald Trump’s state visit next week.

Mr Kyle also admitted that the government knew that Lord Mandelson and Epstein had “a strong relationship”.

“We knew that there were risks involved,” he concluded.

PM had only ‘extracts of emails’ ahead of defence of Mandelson at PMQs – as Tories accuse him of ‘lying’

Speaking to Sky News, Kyle also sought to clarify the timeline of what Sir Keir Starmer knew about Lord Mandelson’s relationship with Epstein, and when he found this out.

It follows Conservative Party leader Kemi Badenoch accusing the prime minister of “lying to the whole country” about his knowledge of the then US ambassador’s relationship with the paedophile.

Allegations about Lord Mandelson began to emerge in the newspapers on Tuesday, while more serious allegations – that the Labour peer had suggested Epstein’s first conviction for sexual offences was wrongful and should be challenged – were sent to the Foreign Office on the same day by Bloomberg, which was seeking a response from the government.

But the following day, Sir Keir went into the House of Commons and publicly backed Britain’s man in Washington, giving him his full confidence. Only the next morning – on Thursday – did the PM then sack Lord Mandelson, a decision Downing Street has insisted was made based on “new information”.

Read more:
Witch-hunt vibe in Labour on who approved appointment
Senior Labour MP demands answers over Mandelson vetting

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Vetting ‘is very thorough’

Speaking to Sunday Morning with Trevor Phillips, Mr Kyle said: “Number 10 had what was publicly available on Tuesday, which was extracts of emails which were not in context, and they weren’t the full email.

“Immediately upon having being alerted to extracts of emails, the Foreign Office contacted Peter Mandelson and asked for his account of the emails and asked for them to be put into context and for his response. That response did not come before PMQs [on Wednesday].

“Then after PMQs, the full emails were released by Bloomberg in the evening.

“By the first thing the next morning when the prime minister had time to read the emails in full, having had them in full and reading them almost immediately of having them – Peter was withdrawn as ambassador.”

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Government deeming Mandelson to be ‘worth the risk’ is unlikely to calm Labour MPs

The Conservatives have claimed Sir Keir is lying about what he knew, with Laura Trott telling Sky News there are “grave questions about the prime minister’s judgement”.

The shadow education secretary called for “transparency”, and told Sunday Morning with Trevor Phillips: “We need to understand what was known and when.”

Laura Trott says there are 'grave questions about the prime minister's judgement'
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Laura Trott says there are ‘grave questions about the prime minister’s judgement’

They believe that Sir Keir was in possession of the full emails on Tuesday, because the Foreign Office passed these to Number 10. This is despite the PM backing Mandelson the following day.

Ms Trott explained: “We are calling for transparency because, if what we have outlined is correct, then the prime minister did lie and that is an extremely, extremely serious thing to have happened.”

She added: “This was a prime minister who stood on the steps of Downing Street and said that he was going to restore political integrity and look where we are now. We’ve had two senior resignations in the space of the number of weeks.

“The prime minister’s authority is completely shot.”

But Ms Trott refused to be drawn on whether she thinks Sir Keir should resign, only stating that he is “a rudderless, a weak prime minister whose authority is shot at a time we can least afford it as a country”.

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