If you have often wondered where your council tax goes and thought you could do a better job of running your local council, you might be surprised at how hard it really is for councils to balance their budgets.
Labour Together, the think tank formerly run by Keir Starmer’s recently departed chief of staff Morgan McSweeney, has published an online game that drives home the financial difficulty faced by councils in balancing their budgets every year in the face of an increasing adult social care bill.
The think tank notes that people see issues such as potholes, dilapidated high streets, and local service breakdown as a direct reflection of the government’s ability. When council tax rises every year, and people see their local services continue to decline, they rightly wonder where all that funding goes.
The answer, Labour Together says, is adult social care, which rises by more than the maximum council tax increase each year.
When councils are continually forced to cut their budgets to fund this rising cost, it breaks their social contract with their residents, which Labour Together argues paves the way for populists to contest elections with more reactive agendas.
This all leads to a scenario where taxpayers feel their council tax is not going anywhere and their local council is failing them, while the council itself is faced with the lose-lose situation of either cutting local services or carrying a growing deficit into the next year.
To understand the difficulty rising adult social care costs pose to local councils, play the Council Simulation game on the Labour Together website.
The simple game places you at the head of a fictional local council modelled on real UK council data, and aims to convey the challenge of rising adult social care costs in the country.
Over four years, you will have to manage the budget of your fictional council, either cutting local services or carrying a growing deficit through until the end of your term.
“No council leader in England can win this game under the current funding system,” the game states on completion.
“Social care demand grows faster than council tax can rise. The gap always has to come from somewhere. The question isn’t whether to cut — it’s which residents you cut for.”
In 2025/26, 350 out of the 384 councils in England raised council tax by close to or at the maximum amount allowable (5% per year). Labour Together said these tax raises were inevitable as social care costs leave councils with no choice.
“Even at maximum council tax every year, a typical council cannot cover social care demand growth. The gap must come from visible services,” the think tank said.
“The bins, the libraries, the parks — these aren’t always cut because of waste or incompetence. They’re cut because adult social care is a national problem being solved with a local tax.”
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