Warwickshire County Council's finance experts are recommending five years of maximum council tax hikes with the politician in charge warning "there is not a lot of room to move".

A report considered by the county's cabinet – the panel of Conservative councillors in charge of major service areas – this week painted a bleak financial outlook, particularly for residents. 

It set out a framework put together by the council's employed finance professionals which councillors from various parties build their annual budget proposals around.

Almost £80 million worth of savings are planned over the next five years, including increased costs for services and cuts to children's centres, mental health and domestic abuse support services and verge cutting. 

On top of that, councillors of all parties are being asked to approve a 4.99 per cent increase in the county's portion of council tax for 2025-26 with the same rise each year now featuring in the medium-term financial strategy (MTFS) – the five-year outline to inform future budgets.

What has changed? 

Last year's MTFS featured assumptions of a 2.99 per cent increase in council tax each year but that has been revised to 4.99 per cent try to balance the books as demand for expensive services like special educational needs and disabilities (SEND), social care and home-to-school transport continues to rise, as do the inflation-driven costs involved with individual cases.

The report to cabinet also highlights the knock-on effect of the rise in National Insurance contributions and the National Living Wage – it anticipates wage rises for those working in the care sector alone will add £9 million to the money the authority must find each year. 

What does it mean for your bill? 

Each portion of council tax goes to different authorities but the biggest chunk goes to the county. 

This year (2024-25), those in an average Band D property paid £1,736.19 to Warwickshire County Council. If it goes up by five per cent for 2025-26, that will become £1,823.

If it continues to go up by the same amount as suggested it will hit £2,215.87 by 2029-30 – £479 more than it is today. 

The blame game

Councillor Peter Butlin (Con, Admirals & Cawston), the deputy leader of the county council who oversees finance and property, told fellow cabinet members that the autumn statement from the new Labour government had added to existing problems. 

"Last year was a very difficult time to set a budget and this year is no different," he said. 

"The one big difference from last year is we now have a different government with different ambitions and agendas in terms of funding local government.

"The budget did not deliver as we thought and the hike in National Insurance contributions has added a significant amount to our balance sheet in terms of costs.

"Although we are being reimbursed for all of the people employed directly by the council, those that are indirectly employed, delivering commissioned services, will not be reimbursed.

"There is also a hike in the National Living Wage, which also affects some aspects of services, again those commissioned services that we purchase."

He acknowledged extra funding coming forward but that cash had been given with one hand and taken away with the other.

"On balance, we are a little bit worse off as a result of the government's budget," he concluded, before expressing hope that the local government settlement, which sets out how much government money goes to councils, would throw up some extra cash.

However, Cllr Butlin appeared to admit defeat on the question of council tax.

"Some 68 per cent of our revenue comes from council tax and there is not a lot of room to move, I must emphasise that," he added. 

"Creating a budget that can address some of the things various parties prefer is not going to be easy at all – we are thankful for the fact we can balance the budget in the first place.

"This is a very tight budget to balance with very limited flexibility due to pressures, context, risks and the recent changes to how funding will be allocated."

Deputy leader of the Labour group Councillor John Holland (Warwick West) hit back, arguing that decisions taken in Westminster had been necessary, citing a £22 billion "black hole" inherited from the previous Conservative government. 

He was asked by leader and cabinet chair Councillor Izzi Seccombe OBE (Con, Stour & the Vale) to "stick to Warwickshire" when commenting.

"The report repeatedly mentions National Insurance contributions and Councillor Butlin mentioned it repeatedly, so I am sticking to Warwickshire," he replied. 

"This is payment for expenditure incurred by the previous Conservative government and I certainly do not think we should kick it down the road and leave it to our children.

"What we should do is look sensibly at what we are going to do. It links in with the National Living Wage which also puts up the cost of employing people which impacts on the council.

"I can't see anyone begrudging the lowest-paid people in the county receiving a modest rise and that money will come straight back because those people will spend their money, it will come straight back into the Warwickshire economy.

"It leads us to the issue of cost effectiveness and productivity. Many economists advise that productivity has to be improved nationally.

"In one of our previous budgets, we proposed a project to improve productivity. Had that gone ahead, we would now be getting more cost effective care services.

"Cost effectiveness and productivity is the aim. That is why we have the money." 

Cllr Butlin reiterated the requirement to set a balanced budget and said that the combination of factors had still materially impacted the council. 

"National Insurance contributions are still added to inflation as extra costs for the council which has undeniably made it more difficult to balance the budget," he added.

"There is also a ceiling as to where council tax can be put, so it does not leave the council with a lot of room to move." 

What now?

The budget and MTFS will be approved in February when each political group has the opportunity to put forward its own proposals or amendments. 

More money could come forward from government to head off some of the £80 million worth of savings required but with the council's overall operational costs expected to go up by £178 million per year by 2029-30, £49 million per year of that being covered by the proposed extra council tax, the maximum council tax rises are going to be hard, perhaps impossible, to avoid.