Every council in the UK faces going bankrupt unless the government takes action on the cost of social services, the council leader in Bath has warned.

Bath and North East Somerset Council is currently set to go over budget this year by £6.5m, mainly driven by children's social services which is over budget by £4.6m. The local authority also faces a £35m budget gap to make up across the next five years.

In addition to inflation and limited income streams, councillors blamed a drop in funding from the central government coupled with a rise in the number of unaccompanied asylum seeking-children in the council care system.

Council leader Kevin Guy told a cabinet meeting on Thursday November 9: "It is a universal problem." He said: "If the funding situation — particularly for adults and children's services — is not rectified by this government or the next government, it is only a matter of time before all local authorities in the United Kingdom go bankrupt."

Mark Elliott, the council's cabinet member for resources, said he was "confident" that Bath and North East Somerset Council would not face bankruptcy. He said the council was taking "urgent action" to stop it going over budget this year, including cutting vacancies, and non-essential training, conferences, travel, and subscriptions.

But he warned: "We are left with a position of very high cost rises, very little room to manoeuvre with regard to income raising and, after years and years of this pressure, not much room for new efficiencies to be made."

He said that the council's operating costs were about £300m and, with council taxpayers' contribution making up about £113m, the council had to rely on income from parking, attractions such as the Roman Baths, and government grants for the rest of its spending. He added that the main support grant from the government had been £31m ten years ago but was now £800k.

Paul May, the council cabinet member responsible for children's services, said the government was allocating unaccompanied asylum seeking-children to the council with "insufficient funding" to cover the cost to the council of looking after them.

He said: "Many are just below the age of 18 when they enter the system, but if the Home Office doesn't approve their asylum case, they remain in the care system and councils retain the statutory responsibility for their care up to the age of 25."

He added that it was "quite right" for the government to share the responsibility for the young people among all local authorities but warned that it was causing additional costs.

Mr May said: "Other local authorities are suffering from similar pressures and sadly the Conservative government does not offer the help we all need. These are vulnerable children and overspends add to budget pressures on the other services that Bath and North East Somerset Council provides across the council area."