Gloucester City Council publishes Budget Report for 2026/27 and Money Plan 2026–2031

The draft budget reflects the robust financial monitoring process introduced over the past few months. The strengthened approach is designed to ensure that any financial variations are identified early and managed throughout the 12 months to avoid significant variances from the budget at the end of the financial year.

The Council believes it can deliver a balanced budget in 2026/27, provided its application for Exceptional Financial Support (EFS) to the Government is approved (See point 1 in note to editors below), and around £1 million is proposed to be achieved through further savings and additional income.

It is important to note that the Council is having to spend approximately £2 million on preparations for Local Government Reorganisation in 2026/27 and 2027/28. These costs have to be met locally and will not be reimbursed by Government.

Council Tax

A commitment to limit the increase in council tax to 2.99% has been made by the Council. It could have chosen to make a request to the Government for a higher rise as part of its Exceptional Financial Support application, but chose not to do so.

Efficiency Savings and Income Generation

The Money Plan identifies the need for ongoing efficiency measures, with targets of:

• £1 million savings in 2026/27.
• £1 million in 2027/28.
• £500,000 in 2028/29.

These targets are necessary to support the Council’s financial recovery plan.

Review of Fees and Charges

An increase in the cost of most fees and charges levied by the Council is being proposed following a comprehensive review completed as part of the budget process.

It considered:

• Inflationary pressures.
• The cost of delivering services.
• Statutory requirements.
• Benchmarking with other local authorities and commercial providers.
• The frequency of previous increases.

Some increases have already been introduced, including car‑parking charges (by the cumulative rate of inflation), which went up in November 2025.

Other fees - such as green waste, bulky waste and fly‑tipping penalties - went up at the start of the year. These are expected to generate £138,000 of additional income.

As part of the review, certain concessions have been removed. Changes in the benefits system mean that most claimants are now on Universal Credit rather than Housing Benefit or Council Tax Benefit, leading to inconsistencies in eligibility for existing concessions.

Overall, about half of the £1 million savings target for 2026/27 is expected to come from increases in fees and charges.

Savings

Towards the end of last year, the Council announced it would cease to operate Blackfriars Priory in May, cut opening days at the Museum of Gloucester to four, reduce financial support for some festivals and events, reorganise the work of the community engagement team and end a scheme which has provided small discretionary grants for specific local projects. In total, these changes will result in 10 redundancies and fixed term contracts for 3 staff ending early.

There will be strict limits on recruitment and all proposed future discretionary spending.

Gloucester City Council leader, Jeremy Hilton, said: “This is a responsible and carefully constructed budget that keeps the council tax increase to just 2.99% while putting the organisation firmly on the path to recovery. Over recent months we have worked hard to reset our finances and strengthen our monitoring processes, and this budget reflects the real progress we are making to get the Council back on track. There will be some increases to fees and charges, but many of them only bring us back in line with other councils across the country. I would like to thank our finance team for their exceptional commitment and diligence in analysing every aspect of our spending and putting robust, transparent systems in place. Their hard work has been vital in enabling us to move forward with confidence.”

Key Financial Principles

The proposed revenue strategy for 2026/27 is built on the following principles:

• Targeting resources to deliver Corporate Plan priorities and value for money.
• Ensuring all new investment or spending decisions reflect Council priorities and strategic commitments.
• Balancing the budget annually, with expenditure limited to available resources.
• Maintaining the General Fund balance at approximately £1.3 million at the end of each financial year.
• Meeting year‑on‑year savings targets through efficiencies, income generation and service transformation.

Medium-Term Financial Strategy

Given the Council’s current financial position, and the need for Exceptional Financial Support, the overriding financial strategy over the coming years – or until Local Government Reorganisation – is to:

Rebuild revenue reserves to sustainable levels.
Reduce borrowing and the scale of debt repayments.
Reset budgets to realistic levels and reduce running costs or increase income to meet them.
Improve in‑year budget monitoring, ensuring greater accuracy and timeliness.

Next Steps

The draft Budget Report and Money Plan will be formally considered by the Cabinet on 11 February 2026 and Council on 26 February 2026. If approved, they will form the basis of the Council’s financial planning for the coming year and the medium‑term period to 2031.