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Council leader says Government ‘needs to fund us more’ after being given £134,000 less

By Joe Locker, Local Democracy Reporter

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The Labour leader of a district council in Nottinghamshire has called on the Government for more funding after the authority was given £134,000 less in its settlement.

Each year central government awards councils money as part of its local government financial settlement, with the funding put towards the running of services.

While some councils, including Nottingham City Council, were awarded millions of pounds more by the new Labour Government compared with previous years, some have been left with less for the next 12 months.

Newark and Sherwood District Council has received £134,000 less in its funding settlement for the year beginning April 2025.

During a Cabinet meeting on Tuesday (February 18), council leader Cllr Paul Peacock (Lab) said: “I know local government has been underfunded for probably 20 years.

“Some of the last Labour Government was also underfunding, but the year-on-year underfunding of local government is another reason why many councils across the country have been putting the begging bowl out to Government to increase council tax hikes by more than the three per cent for districts, and five per cent for county councils.

“More and more councils are closer to Section 114 notices than ever before, and that’s not down to a one-year funding agreement from this Labour Government, that’s because of the 14 previous years of local government funding agreements from the Conservative government, and they are just facts.

“What has happened this year…is not to my liking. I would always like a bit more.

“But I think they have changed the funding somewhat so more of the money goes to councils that have more disadvantage within their areas. That is why we have come in at almost a break even increase.

“I do want a government who believes in local government…so they do need to fund us more.”

Council budget papers show the authority has been lumped with additional National Insurance costs amounting to £412,000, following Chancellor Rachel Reeves’ autumn budget announcement in October.

From April this year employers will face higher National Insurance contributions on their payroll payments.

Ms Reeves lowered the current £9,100 threshold employers start paying contributions down to £5,000, while the percentage of contributions will also go up from 13.8 per cent to 15 per cent.

These costs have partially been offset by a grant, however the impact the budget is still expected to be around £270,000.

Costs related to employees, including minimum wage rises, and utilities, have also increased by £1.375m.

The authority is also planning to increase council tax by the maximum amount allowed, which is 2.99 per cent.

The council tax charge for Band D properties in the 2024/25 financial year – the current year – is £194.82.

A charge of £200.65 for the 2025/26 financial year has been assumed in the budget papers.

This means those living in Band D properties will pay an extra £5.83 from April, subject to the final budget being approved in March.

However, because 73 per cent of properties in Newark and Sherwood area are in bands A to C, the increase for these properties will be less than £5.83 per year.

Around 41 per cent of all properties in the district are in Band A, which currently has a charge of £129.88.

The proposed charge from April is £133.77, an increase of £3.89.

Cllr Peacock told the Local Democracy Reporting Service the authority is expecting to set a balanced budget for the financial year beginning April 2025, despite the funding shortfall.