Rutland County Council is preparing its latest annual budget for 2025/26, after being informed it will lose more than 10% (£1.5million) of its government funding this year.
The Council must set a balanced budget each year. The amount it spends on running local services can’t be more than the total amount it receives from its four main sources of income – grant funding from national government, fees and charges, Council Tax and Business Rates.
The recent change in government has led to a major shift in how some councils will be funded in future. Through its new Local Government Finance Policy (announced last year) national government has said it will prioritise funding for regions with high deprivation and scrapped a grant which previously gave Rutland County Council more than £1million a year towards the cost of running rural services. Together, these changes mean the authority has lost 14% of its grant funding with little warning – placing it under even greater financial pressure as it prepares to set its budget for the 2025/26 financial year.
An initial draft of the Council’s latest budget, explaining what the authority plans to spend and save over the next 12 months, will be presented to Cabinet on Tuesday 14 January, ahead of public consultation.
“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. Unfortunately, this year our task has been made even harder by changes to national policy, which are incredibly harsh on rural areas like Rutland.
“We’ve already embarked on a new financial strategy, after several years of using money from our reserves to balance the budget. We’ve worked incredibly hard to make long-term savings by changing how services are delivered, rather than simply cutting them, as many councils have been forced to do. This extensive transformation work is taking place throughout the Council, most notably in areas like transport, the management of our buildings, our community services, data and technology and special educational needs. As a result, we’ve finally managed to reach a point where Rutland County Council will no longer use its reserves to fund day-to-day service delivery.
“Even with all this work, we’ve seen our overall costs increase by £5.6m going into 2025/26. This includes the loss of general government grants worth £1.5m. Further savings have had to be found because of this sudden loss of government funding. However, we remain on track and hope residents will recognise the hard work that's gone into putting the Council on a secure financial footing.”
Councillor Andrew Johnson, Cabinet Member for Resources and Governance
The total cost of funding local services in Rutland in 2025/26 is £91.3 million (up from £85.9 million last year). Overall, adult social care and children’s services (including education provision funded by the Council) now represent more than half (56%) of the Council’s gross budget, with costs continuing to grow. A gradual rise in the number of children requiring complex care is expected to cost an additional £300k by 2027/28. Demand for adult social care packages is expected to cost an additional £1.4m by 2027/28.
To help offset rising costs, the Council’s budget includes proposals for a Council Tax rise of 2.99%, together with a 2% precept to help fund adult social care services – something that the government has assumed all councils will do, when calculating their future funding allocations. If approved, the average Council Tax for a Band D property would increase by £8.78 per month. The Council also expects to generate additional income of £1.1m from fees and charges in 2025/26. By law, councils cannot make a profit through fees and charges and can only use them to recover the cost of providing a service.
The draft budget for 2025/26 includes a range of other measures to help the Council increase its income and recover cost. These range from an £80k saving by changing how the Council secures beds when arranging care packages for older people, through to a £363k saving resulting from changes to waste management and the sale of recyclable materials. Savings on waste management have been critical in helping to meet the increased costs associated with preparing for government-mandated food waste collections in Rutland.
The budget also sets aside £1.3m for a Council Tax Reduction Scheme to provided additional support for people and families on a low income.
“Residents will know from previous budgets that Rutland has a particularly raw deal when it comes to government funding, which has a significant bearing on our Council Tax rates. Our general grant allocation from government is around £540 per dwelling, compared to a national average of £1,165. As a result, we rely on Council Tax for 79% of our funding, compared to the national average of 56%. After making hundreds of thousands of pounds worth of savings, we’re disappointed that we must propose a further increase in Council Tax. It is not something that any Councillor wants to do. We’re left with little choice because of the poor hand we continue to be dealt by national government.”
Cllr Andrew Johnson
The agenda and reports for our next Cabinet meeting on Tuesday 14 January can be read in full on our Meetings page. The meeting will be held in the main Council Chamber and will be streamed live online from 10.00am.
