Council Tax Increases Across England: A Balancing Act Amid Financial Pressures
Published 3 February 2026
Highlights
- Surrey County Council approved a 4.99% tax increase, marking its last budget before a major local government restructure in 2027.
- Leicestershire County Council plans a 2.99% tax rise, the first below the 4.99% cap in 12 years, using reserves to cover a budget gap.
- Birmingham City Council, recovering from a financial crisis, plans a 4.99% tax hike while investing £130m in services.
- Bournemouth, Christchurch, and Poole Council seeks a 7.5% tax rise to manage SEND debt, pending government approval.
- Reform UK-led Warwickshire County Council proposes a 3.89% tax increase, balancing financial pressures with election promises.
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Rewritten Article
Council Tax Increases Across England: A Balancing Act Amid Financial Pressures
Local councils across England are grappling with financial challenges, leading to proposed council tax increases as they strive to balance budgets and maintain essential services. From Surrey to Birmingham, and Leicestershire to Bournemouth, councils are navigating complex financial landscapes amid rising costs and government funding constraints.
Surrey's Final Budget Before Restructure
Surrey County Council has approved a 4.99% council tax increase, marking its last budget before a significant local government restructure in 2027. Conservative leader Tim Oliver highlighted the shift in funding sources, with council tax expected to account for 92% of income by 2028, up from 77% currently. Despite opposition from Liberal Democrats and Labour, the budget passed with support from various councillors. Plans for a 4.4% increase to fund police services are also under discussion.
Leicestershire's Strategic Tax Decision
Leicestershire County Council confirmed a 2.99% tax rise, the first below the 4.99% cap in 12 years. The Reform UK-led authority will use £18m of reserves to address a budget gap. Harrison Fowler, Cabinet member for resources, emphasized the council's commitment to not imposing the maximum increase, despite financial pressures. The budget awaits full council approval on 18 February.
Birmingham's Recovery and Investment
Birmingham City Council, emerging from a financial crisis, plans a 4.99% tax hike while investing £130m in services. Council leader John Cotton declared the "bankrupt Birmingham" era over, attributing the recovery to decisive actions addressing a £300m budget gap and equal pay liabilities. The council continues to work with government commissioners to ensure financial stability.
Bournemouth's SEND Debt Challenge
Bournemouth, Christchurch, and Poole Council is seeking a 7.5% tax rise to manage a £380m SEND debt, pending government approval. Council leader Millie Earl stressed the importance of raising funds to protect key services, including lifeguards and public toilets. The council has requested an exemption from the 4.99% cap, with the Ministry of Housing, Communities and Local Government considering the case.
Warwickshire's Balancing Act
In Warwickshire, Reform UK leader George Finch defended a 3.89% tax rise, balancing financial pressures with the party's low-tax promises. Despite concerns from financial executives about the sustainability of the strategy, Finch emphasized the need to address SEND transport costs and other national pressures. The council aims to make savings through efficiency measures, including AI and transformation initiatives.
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Scenario Analysis
As councils across England navigate financial pressures, the implications of these tax increases are multifaceted. In Surrey, the shift towards greater reliance on council tax could prompt further discussions on local government funding models. Leicestershire's strategic use of reserves highlights the delicate balance between fiscal responsibility and service provision.
Birmingham's recovery underscores the importance of decisive leadership and strategic investment in overcoming financial crises. Meanwhile, Bournemouth's SEND debt challenge may influence future government policies on educational funding and local authority support.
Warwickshire's approach reflects the broader tension between political promises and fiscal realities, with potential implications for Reform UK's future electoral prospects. As councils implement these tax increases, the focus will remain on achieving financial sustainability while addressing the needs of local communities.
Local councils across England are grappling with financial challenges, leading to proposed council tax increases as they strive to balance budgets and maintain essential services. From Surrey to Birmingham, and Leicestershire to Bournemouth, councils are navigating complex financial landscapes amid rising costs and government funding constraints.
Surrey's Final Budget Before Restructure
Surrey County Council has approved a 4.99% council tax increase, marking its last budget before a significant local government restructure in 2027. Conservative leader Tim Oliver highlighted the shift in funding sources, with council tax expected to account for 92% of income by 2028, up from 77% currently. Despite opposition from Liberal Democrats and Labour, the budget passed with support from various councillors. Plans for a 4.4% increase to fund police services are also under discussion.
Leicestershire's Strategic Tax Decision
Leicestershire County Council confirmed a 2.99% tax rise, the first below the 4.99% cap in 12 years. The Reform UK-led authority will use £18m of reserves to address a budget gap. Harrison Fowler, Cabinet member for resources, emphasized the council's commitment to not imposing the maximum increase, despite financial pressures. The budget awaits full council approval on 18 February.
Birmingham's Recovery and Investment
Birmingham City Council, emerging from a financial crisis, plans a 4.99% tax hike while investing £130m in services. Council leader John Cotton declared the "bankrupt Birmingham" era over, attributing the recovery to decisive actions addressing a £300m budget gap and equal pay liabilities. The council continues to work with government commissioners to ensure financial stability.
Bournemouth's SEND Debt Challenge
Bournemouth, Christchurch, and Poole Council is seeking a 7.5% tax rise to manage a £380m SEND debt, pending government approval. Council leader Millie Earl stressed the importance of raising funds to protect key services, including lifeguards and public toilets. The council has requested an exemption from the 4.99% cap, with the Ministry of Housing, Communities and Local Government considering the case.
Warwickshire's Balancing Act
In Warwickshire, Reform UK leader George Finch defended a 3.89% tax rise, balancing financial pressures with the party's low-tax promises. Despite concerns from financial executives about the sustainability of the strategy, Finch emphasized the need to address SEND transport costs and other national pressures. The council aims to make savings through efficiency measures, including AI and transformation initiatives.
What this might mean
As councils across England navigate financial pressures, the implications of these tax increases are multifaceted. In Surrey, the shift towards greater reliance on council tax could prompt further discussions on local government funding models. Leicestershire's strategic use of reserves highlights the delicate balance between fiscal responsibility and service provision.
Birmingham's recovery underscores the importance of decisive leadership and strategic investment in overcoming financial crises. Meanwhile, Bournemouth's SEND debt challenge may influence future government policies on educational funding and local authority support.
Warwickshire's approach reflects the broader tension between political promises and fiscal realities, with potential implications for Reform UK's future electoral prospects. As councils implement these tax increases, the focus will remain on achieving financial sustainability while addressing the needs of local communities.
