Happy New Year.
My first update carries on from where my last one concluded. Since 17th December, we’ve been working through the implications of the Provisional Local Government Finance Settlement for Trafford Council. It took some time to understand, but it has helped us firm up numbers to include in our Draft Budget Proposals for 2026/27. Originally, we planned to publish a Draft Budget in October, however a local by-election -and restriction on council activity- meant the next option available was early December. As the December date was so close to the publication of the provisional settlement, it made sense to wait until the New Year so that we could provide the most accurate information in our Draft Budget.
You may have seen in the news that we are seeking financial support from the government- and it is appropriate to use this update to explain why. A good starting point is to revisit a budget update I provided in February 2025. I would encourage you to read that update- everything in it still stands, and continues to be and accurate description of Trafford’s financial situation.
What’s happened since then? As soon as we agreed the council’s budget for 2025/26, we started planning for the next three years. This included comparing our budget spend with what other councils spend. We did this to help us understand where we may be outliers, and what we can learn from other local authorities in terms of best practice. It was a helpful exercise, and it is supporting transformation work we continue to do at Trafford.
That transformation work, coupled with other policy choices, meant that we had successfully reduced our original forecast £50m budget gap over the next three years to £10m. We had addressed 80% of our original budget gap, a significant achievement.
In addition, over the course of this current financial year we are currently projecting an underspend of our budget. This is an indication of the good financial management and mature approach the council takes, which has been referenced by the Chartered Institute of Public Finance and Accountancy (Cipfa) and by Local Government Association colleagues following our 2025 Corporate Peer Challenge.
What happened next? Last summer the government launched what’s called a Fairer Funding Review to look at how money is distributed across local councils. This review’s main aim was to ensure funding was reaching areas of higher need and higher deprivation. Other elements of the government review included a Business Rates reset, looking at how and where collected business rates are allocated to councils and Council Tax equalisation, where the government looked at the levels of council tax charges for Band D, but because of our low comparative council tax we have been impacted.
The council’s draft budget clearly sets out the impact the Fairer Funding Review has on our financial forecast. Our budget gap increases by a further £24m over three years. I agree with the principle that underpins much of what the government wishes to achieve however, as it stands, the review does not work for Trafford. It does not alleviate the structural deficit our council has carried for years- a deficit exacerbated by a decision to freeze council tax between 2011 and 2015. The provisional settlement does not reflect the £334m cumulative budget shortfalls the council has bridged since 2010. It does not reflect that throughout Trafford’s history, we have had a low level of reserves compared with other boroughs.
We now have a consultation period of a few weeks before Trafford’s financial settlement from government is finalised, I’ll be working with colleagues and engaging with ministers regarding the structural financial challenges Trafford Council faces as we collectively work towards a sustainable financial future for the Borough. In the meantime, our amazing council workforce continues to deliver the services that matter to you- from libraries and leisure centres to social care and environmental services- and all the many other services in between.
I appreciate this is a lengthy commentary on our draft budget, but it continues to be important to provide a full update on what can be a complex subject. I’ll provide another update once we present our final budget proposals in the spring.