Council tax in Nottingham won’t increase by 10 per cent, leader promises

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By Joe Locker, Local Democracy Reporter

The leader of Nottingham City Council has confirmed the authority will not be increasing council tax to highs of ten per cent.

The Labour-led authority says its financial position has been improving, and its budget gap for the year beginning April 2025 has fallen from £69m to £23.4m.

An overall total budget gap over the next four years has also been reduced from £172m to £56.8m.

The council said its improved finances are down to a combination of factors, including a better than expected settlement from the Government and “large-scale transformational changes”.

New savings and cuts, including £17.9m to be delivered next year and £24m over the next four years, were also announced in December.

During an Executive Board meeting on Tuesday (January 21), leader of the council, Cllr Neghat Khan (Lab), confirmed the council would not be increasing the council tax above 4.99 per cent from April.

Birmingham City Council is currently planning to hike council tax by 9.99 per cent for the second year in a row, while Bristol City Council opened a consultation over a 15 per cent rise in November last year. Both also have serious financial problems.

Cllr Khan said: “As the leader of this council I can confirm that we are going nowhere near the ten per cent increase in council tax.

“Even though the Government has given us more money, we have got to recognise 14 years of Tory austerity can’t be [reversed] within six months of a Labour Government, but we are moving in the right direction.

“We still have difficult choices to make and we still have to spend within our financial envelope.”

The council declared itself effectively bankrupt in November 2023 after it was unable to set a balanced budget, and the authority had to apply for ‘Exceptional Financial Support’ (EFS) to bridge the gap in its finances.

EFS is an accounting mechanism granted by the Government to allow the council to use property sales to fund day-to-day costs, and the authority was initially allowed to use up to £65m to set a balanced budget in 2023/24 and 2024/25.

The council says it will again require EFS of up to £25m for the 2025/26, and up to £10m in 2026/27.

It is then hoping it can achieve a balanced budget without the support after two years.

During the meeting Cllr Linda Woodings (Lab), executive member for finance, said the improved financial position is “still not enough to avoid us having to apply for EFS”.

Cllr Andrew Rule, of the Nottingham Independents and Independent Group, said: “The previous government penalised councils which used EFS by making them increase council tax [over] the referendum limit.

“Can you therefore have assurance from the current government they have moved away from this practice?”

Cllr Woodings claimed the new Labour-led Government says it will only ask for that “in the most extreme circumstances”.

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