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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.

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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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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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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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Why Boris’s best mate is off to Reform

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Why Boris's best mate is off to Reform

👉Listen to Politics at Sam and Anne’s on your podcast app👈       

Former Conservative chairman and friend of Boris Johnson – Sir Jake Berry – is defecting to Reform UK, causing more problems for Tory leader Kemi Badenoch.

On today’s episode, Sky News’ Sam Coates and Politico’s Anne McElvoy discuss if his defection will divide parts of Reform policy.

Elsewhere, the Anglo-French summit gets under way, with Prime Minister Sir Keir Starmer hoping to announce a migration deal with French President Emmanuel Macron to deter small boat crossings.

Plus, chatter around Whitehall that No10 are considering a pre-summer reshuffle, but will it have any value?

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Australia to test CBDCs, stablecoins in next stage of crypto play

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Australia to test CBDCs, stablecoins in next stage of crypto play

Australia to test CBDCs, stablecoins in next stage of crypto play

The trial is part of Project Acacia, an initiative from the RBA exploring how digital money and tokenization could support financial markets in Australia.

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Starmer and Macron agree need for ‘new deterrent’ to stop small boat crossings

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Starmer and Macron agree need for 'new deterrent' to stop small boat crossings

Sir Keir Starmer and Emmanuel Macron have agreed the need for a “new deterrent” to deter small boats crossings in the Channel, Downing Street has said.

The prime minister met Mr Macron this afternoon as part of the French president’s state visit to the UK, which began on Tuesday.

High up the agenda for the two leaders is the need to tackle small boat crossings in the Channel, which Mr Macron said yesterday was a “burden” for both the UK and France.

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The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.

Sir Keir is hoping he can reach a deal for a one-in one-out return treaty with France, ahead of the UK-France summit on Thursday, which will involve ministerial teams from both nations.

The deal would see those crossing the Channel illegally sent back to France in exchange for Britain taking in any asylum seeker with a family connection in the UK.

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However, it is understood the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.

French newspaper Le Monde reports that up to 50 small boat migrants could be sent back to France each week, starting from August, as part of an agreement between Sir Keir and Mr Macron.

A statement from Downing Street said: “The prime minister met the French President Emmanuel Macron in Downing Street this afternoon.

“They reflected on the state visit of the president so far, agreeing that it had been an important representation of the deep ties between our two countries.

“Moving on to discuss joint working, they shared their desire to deepen our partnership further – from joint leadership in support of Ukraine to strengthening our defence collaboration and increasing bilateral trade and investment.”

It added: “The leaders agreed tackling the threat of irregular migration and small boat crossings is a shared priority that requires shared solutions.

“The prime minister spoke of his government’s toughening of the system in the past year to ensure rules are respected and enforced, including a massive surge in illegal working arrests to end the false promise of jobs that are used to sell spaces on boats.

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“The two leaders agreed on the need to go further and make progress on new and innovative solutions, including a new deterrent to break the business model of these gangs.”

Chris Philp, the shadow home secretary, seized on the statement to criticise Labour for scrapping the Conservatives’ Rwanda plan, which the Tories claim would have sent asylum seekers “entering the UK illegally” to Rwanda.

He said in an online post: “We had a deterrent ready to go, where every single illegal immigrant arriving over the Channel would be sent to Rwanda.

“But Starmer cancelled this before it had a chance to start.

“Now, a year later, he’s realised he made a massive mistake. That’s why numbers have surged and this year so far has been the worst in history for illegal channel crossings.

“Starmer is weak and incompetent and he’s lost control of our borders.”

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