Changes to Council Funding – What it could mean for our Community
The Government has recently announced changes to the way principle local councils will be funded over the next three years, as part of a national review known as Fair Funding Review 2.0.
Published: 11 September 2025
Under the new system, councils will have their funding needs reassessed using updated formulas. These changes are being introduced gradually but will be permanent. The Government expects larger councils (like County and District Councils) to increase council tax by up to 5% each year to help fund services during this transition.
However, analysis by the County Councils Network (CCN) warns that county and rural areas may face a real-terms reduction in funding, even with higher council tax. A major part of the change involves how council tax income is taken into account nationally — the Government will now consider 100% of what councils can raise locally, rather than the previous 85%. This means more money raised in rural areas like ours will be redistributed to urban councils.
As a result, county areas could lose up to £1.6 billion, with 32 out of 38 rural councils facing cuts totalling around £400 million.
What This Means for Us
- Local services may come under pressure as principal councils work with tighter budgets.
- There may be more reliance on Parish Councils to support or deliver certain local services, especially community-based ones.
- The Parish Council will need to carefully plan and budget in the years ahead to ensure local needs continue to be met.
We’ll continue to monitor developments and keep residents updated, especially once final funding decisions are announced later this year.