The Council has estimated an £18.2m deficit for the next financial year (2026/27) and has already written to the Ministry of Housing, Communities and Local Government for permission to increase Council Tax by 9.99%.
Raising Council Tax is just one of three ways that the Council can raise their budget. They can also ask permission to take “Exceptional Financial Support” (EFS) in the form of financial loans (that attract interest and must be paid back over 20 years), together with the “capitalisation” of Council assets (usually buildings or land assets).
Alongside the Council Tax request, Cheshire East’s Labour and Independent Administration have also asked for significant EFS and permission to capitalise assets.
FINANCE SUB-COMMITTEE MEETING:
All three EFS options will be discussed at the Finance Sub-Committee tomorrow and their findings will be forwarded to the Corporate Policy Committee and in due course, to the Full Budget Council in February.
The report states:
“The section 151 officer (director of finance and assets), is clear that the scale and challenge faced by the council is such that it has no choice but to consider both capitalisation directions and council tax flexibility as tools to support the route to financial stability.”
“Council tax flexibility at 9.99 per cent will add more than £15 million to the base income, whereby every one per cent on council tax equates to more than £3 million of additional income.”
“As such, it is the professional advice of the section 151 officer that the council’s EFS request be both capitalisation and council tax flexibility up to 9.99 per cent and the ongoing dialogue with MHCLG (ministry of housing, communities and local government) has been to that effect.”
At the moment, Local Authorities may only raise Council Tax to a maximum of 4.9% before they have to hold a public referendum. Seeking permission from Government waives the Referendum requirement.
SO WHAT DOES THIS MEAN FOR RESIDENTS?
What this means in real terms is that an increase of 4.99 per cent – the amount that the Labour Government has already stated it expects Local Authorities to charge – would see council tax in Cheshire East rise from the current £1,882.04 to £1,975.95 a year for a band D property.
If the rate rises to 9.99% the figure for a band D property rises to £2,070.06.
(It must be noted that these rises are separate to the additional precepts that will be raised by the Cheshire Police Authority and by Cheshire Fire and Rescue.)
Of course, Cheshire East Council has been experiencing significant financial pressures for the past few years. A request last year for 9.99% council tax rise was refused by Government but over £30m of EFS borrowing was permitted. Unfortunately, this sum, intended to get the Council back to a sustainable financial footing, had to be used in its entirety to balance the budget for 2025/26.
For further information:
Finance Sub-Committee Reports (30.01.2026)
https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CId=965&MId=11106&Ver=4
