Rutland County Council Prepares Latest Budget Amid Sudden Loss of Government Funding
Rutland County Council is in the process of drafting its annual budget for the 2025/26 financial year, grappling with a significant setback of losing £1.5 million—or over 10%—of its government funding. This loss has prompted the council to consider a potential 5% increase in council tax in order to maintain financial stability and ensure continued service delivery.
The council is legally obligated to set a balanced budget, meaning that spending on local services cannot exceed the total income generated from grants, fees, council tax, and business rates. The recent changes in government policy have resulted in a substantial shift in how councils receive funding, with a new Local Government Finance Policy prioritizing areas with high levels of deprivation. Unfortunately for Rutland, this has led to the scrapping of a crucial grant that previously provided more than £1 million annually to support rural services.
Councillor Andrew Johnson, the Cabinet Member for Resources and Governance, expressed concern over the new challenges posed by national funding policies. "This Council has a history of sound financial management, even with the health of our national economy, rising inflation, and growing demand for the care services we provide," Johnson stated. However, he lamented that recent policy changes have created even greater financial pressures on rural councils like Rutland.
The council has been proactive in adjusting its financial strategy over the past few years, working to implement long-term savings and changes to service delivery instead of resorting to cuts. Initiatives in various departments—including transport, building management, community services, data and technology, and support for special educational needs—have allowed the council to stabilize its financial footing without depleting reserves for everyday expenses.
Despite these efforts, Rutland's overall costs are set to rise by £5.6 million for the upcoming budget year, which includes the loss of the aforementioned government grants. As a result, the council is compelled to find additional savings to mitigate the impact of this financial loss.
The total projected cost of funding local services in Rutland for 2025/26 is £91.3 million, an increase from £85.9 million the previous year. Notably, adult social care and children’s services now account for more than half (56%) of the council's gross budget. Projections indicate a gradual increase in demand for such services, with anticipated costs adding an extra £300,000 for children's complex care and £1.4 million for adult social care packages by the 2027/28 financial year.
To counterbalance these escalating costs, the budget includes a proposed Council Tax rise of 2.99%, accompanied by an additional 2% precept specifically earmarked for funding adult social care services. If approved, the average council tax for a Band D property would see an increase of approximately £8.78 per month. The council also expects to generate an additional £1.1 million from fees and charges.
In addition to the proposed tax increase, the draft budget outlines various cost-saving measures to bolster income. This includes savings from revised approaches to securing care packages and waste management, which collectively contribute to addressing the budgetary shortfall.
Line items in the budget also allocate £1.3 million for a Council Tax Reduction Scheme, aimed at providing support for low-income families.
Cllr Johnson pointed out that Rutland has historically received an inadequate level of government funding, which impacts council tax rates significantly. With the general grant allocation from the government around £540 per dwelling—compared to a national average of £1,165—the council relies heavily on council tax, which constitutes 79% of its funding. "After making hundreds of thousands of pounds worth of savings, we’re disappointed that we must propose a further increase in Council Tax," he said, asserting that this increase is an unfortunate necessity given the council's ongoing struggles with funding.
As Rutland County Council prepares for upcoming budget discussions and consultations, the challenges posed by decreased government funding underscore the importance of community engagement and informed decision-making for the future of local services.
