County Council proposes lowest tax rise in 12 years

The proposed increase – made up of a 1.8 per cent rise and a 2 per cent Adult Social Care Precept – is well below the 4.99 per cent the Government allows without a referendum.  

It is also in line with the inflation figures announced in September 2025, which are typically used by the government to decide the level of increase for many benefits. 

The proposed increase comes amid ongoing financial pressures facing local authorities, requiring careful and responsible decision making to protect vital services. 

In September 2025, the council reported a projected overspend of approximately £28m for that year, largely due to pressures in Adult Services and Children's Services. Through a range of measures and efficiencies the council has already made savings in 2025/26, such that the overspend reduced to £10.4m at the half year position and to £6.2m by December 2025. 

The Draft Budget seeks to balance the need to maintain vital services with an ongoing commitment to value for money. It proposes solutions to the four key financial risks to the council by meeting the costs of SEND, funding the Dedicated Schools Grant deficit in Education, presents a Strategy for the management of the council's long-term investments and investing £93m in frontline services including Highways. 

Savings of over £60m are outlined for 2026/27, alongside the creation of a Working Capital Enhancement Reserve to further strengthen financial resilience.   

The council is also set to receive an extra £24m in Government funding following the Fair Funding Review. However, the savings are needed as part of an overall package to meet the various cost commitments set out in the report 'Draft Budget 2026/27' published yesterday.   

The draft budget outlines that, by 2030/31, the council’s debt to finance the capital programme will have reduced to £1.056bn, down from £1.181bn in 2026/27.

Council Leader Stephen Atkinson said: 

“This remains a very challenging time for local government with a need to make savings while demand increases. 

“We are working hard to make sure the decisions we make are the right ones and people’s council tax is used wisely, with any increase kept to a minimum. 

“At a time when an increasing number of councils are effectively going bust – with around one in four in England requiring exceptional financial support – we’re proposing the lowest council tax rise in Lancashire in 12 years.

"However, if the council had not made its bond investments, I am confident we would not now need to increase council tax by 1.8 per cent. 

"This proposed additional charge represents 85p per week for a Band A property and 99p per week for a Band B property. 

 “This is a historic moment for this council and indicative of the sea change that is currently happening in Lancashire.” 

The draft budget will now be reviewed by the Budget and Finance Scrutiny Committee and cabinet before a final decision by Full Council next month. 

Members will be told the council is in a stable financial position, but ongoing pressures and risks require continued vigilance and transformation. 

While some staffing reductions will need to be considered, the council will seek to minimise the impact through measures such as natural turnover and redeployment. 

 Cllr Atkinson said: 

“When my colleagues and I were elected, we made a promise to carefully scrutinise all aspects of the council’s finances to ensure taxpayers were getting good value for money. 

“We are in a fortunate position that we now have a package of efficiencies where we are already seeing value for money being delivered, and we will build on that. 

“There is still a lot of work to be done, and a range of savings will need to be met, but this budget signals our intention to ensure the council is on a stable financial footing while continuing to deliver vital services for residents. 

“I would also like to thank everyone who took the time to take part in our budget consultation. Your feedback plays an important role in helping us make informed decisions on behalf of our communities.”