As Government announced the final Local Authority Funding Settlement this week, Cheshire East was informed that their request to raise a 9.99 per cent council tax hike had been refused.
A similar request to Government last year was also refused meaning that Cheshire East cannot raise Council Tax by more than 4.99% unless a public referendum is held. In advance of the Council’s Corporate Policy Committee on Thursday 12th February, the Council is currently facing a projected budget deficit of £30.9m.
Speaking to the Local Democracy Reporting Service this week, a Council Spokesperson stated:
“The request to increase council tax was one option for councillors to consider through the council’s budget setting process, which the council recognised as requiring permission from central government.
“Councillors will now work to agree a budget through the remaining options, including a request for additional exceptional financial support, which is subject to a further government decision, and a range of budget proposals for savings, income and growth, and feedback from public consultation and engagement through the annual budget setting process”.
“Also announced by government yesterday was the high needs stability grant which is due to bring a betterment of £2.7 million in 2026/27 and the £5.3 million in 2027/28 to council financial position.”
Cllr Chris O’Leary (Sutton, Con), the opposition spokesperson for finance, said the local government finance settlement was ‘good news and bad news’ for Cheshire East.
“The good news is that the Labour government have refused the request from Labour/Independent-run Cheshire East Council to raise the council tax by 9.99 per cent in 2026/27.
“This means that the borough’s taxi drivers, factory workers, shop assistants, police officers, nurses, and teachers will not see their council tax rise by nearly four times the rate of inflation”.
But he added:
“This does however mean that the council will now need to borrow £30m for 2026/27 just to cover day to day costs.
“The failure of the transformation programme to deliver £14m in savings this year, plus the additional approximate £10m in costs of dealing with Labour’s failures on the borough’s children’s services – the inadequate rating and the costs of servicing the DSG SEND debt – almost entirely explain that gap.”
The Corporate Policy Committee will examine the draft Mid Term Financial Settlement (MTFS or “Budget” in depth and in the light of further modifications by the S151 (Finance) Officer.
These will reflect a 4.99% Council Tax rise (rather then 9.99%) together with the additional Exceptional Financial Support (EFS) borrowing that will be needed to cover projected budget short-falls over the life of the MTFS - subject again, to the Government’s permission.
The Committee is then required to make its formal recommendations to Full Council later this month to ether approve or refuse the budget as presented.
The S151 Officer has made it very clear in his Section 25 Report, that without additional Exceptional Financial Support, Cheshire East Council may not be able to produce a balanced budget as required under Local Government Legislation.
References:
2. Section 25 Report https://moderngov.cheshireeast.gov.uk/ecminutes/documents/s130276/Appendix%20A%20for%20Section%2025%20Statement%20of%20the%20Section%20151%20Officer.pdf
3. https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CId=959&MId=11111&Ver=4
