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Chief Financial Officer statement about the 2025-26 finance settlement

Millmead Offices

Millmead offices
We've received notification of the provisional local government finance settlement from central government.  The national average increase in council funding for 2025-26 is 6%. However, this includes funds raised from an assumed increase in council tax. The remaining increase is new grant funding. 

This has been targeted at councils with:

  • social care responsibilities
  • the highest levels of deprivation

We will not be receiving any increase in its core funding for 2025-26. This assumes a council tax increase of 2.99%. The income that we could raise from this will be cancelled out by a matching reduction in government grant. We will have to meet inflationary and demand pressures on the council from our existing resources.  

What the government has promised

  • some compensation to the public sector towards the extra employers' national insurance (NI) burden that was announced in the Chancellor's autumn statement.
  • at present, no figures for individual councils have been provided. 
  • the £515m national allocation for local government only appears to cover a fraction of our extra NI costs of around £1,000 per employee.   

The finance settlement is again for a single year. A consultation has also been launched on a wider review of local government funding, with the intention of implementing changes from 2026-27. This is likely to include a multi-year funding settlement, which would help with future budget planning.

Other helpful information

  • our Chief Financial Officer is Richard Bates, Joint Strategic Director, Finance and Resources (Section 151 Officer) for Guildford and Waverley Borough Councils.
  • social care is provided by upper tier authorities, which in our case is Surrey County Council.
  • a decision on the rate of council tax we will charge for 2025-26 has not yet been made. However the government has assumed we will opt for the maximum increase.