County leader warns of 'difficult year' ahead as council eyes three per cent tax rise

Lincolnshire County Council has launched a consultation on its 2025/26 budget, which includes a proposed 2.99 per cent council tax increase.

The rise is expected to generate an additional £11.7 million, based on the current council tax base, increasing Band D bills from £1,578.69 to £1,625.85 annually.

This year, the council is planning to use a net budget of over £690m to continue providing vital services, including adult care, children’s services, highways and Lincolnshire Fire and Rescue.

The Conservative-led council’s executive approved the draft budget during a meeting on Tuesday (January 7), formally starting the consultation process. Feedback will contribute to an updated proposal, set to return to the executive on Tuesday, February 4.

At that meeting, the executive will determine the final proposal to be presented to the full council during its budget-setting session on Friday, February 21, 2025.

Leader Martin Hill has warned of a “difficult year” ahead following the announcement of the central government’s provisional local government finance settlement in December.

“We know these are very difficult times,” he said, claiming that Lincolnshire County Council is “one of the worst-funded councils in the whole of the country.”

He explained: “Two things were very disappointing in the budget we received from government. First of all, they removed something called the rural services delivery grants which for us was worth £9.4 million. They replaced it with something called the recovery grant of which we got nothing. But we find that councils like Birmingham suddenly get an extra £40m.

“The second issue is the impact of national insurance contributions. There will be a direct cost to the county council for those people we employ, we estimate that to be around £5m. We only got just under £4m for that, so we are out of pocket there.

“The bigger sum is the issue of contractors we employ for all sorts of things. They of course will also have to pay the extra employer contributions and the government have given no extra money for that. That could be an extra £10-£13m cost coming to the county council.”

“There’s two big hits there. We have got some extra money for highways and social care, but overall it’s very disappointing.”

The Conservative leader also highlighted that the “bigger worry” is that if future settlements take a similar approach.

“If this is the direction of travel where money is basically being taken away from rural areas like Lincolnshire and given to cities like Birmingham, that is going to make life very difficult.”

Coun Hill said some may argue that a five per cent rise in council tax – the maximum allowed before a referendum – would be necessary but he says the authority recognises that households and businesses are under a lot of pressure and he is looking to protect council tax payers, with the council instead choosing to use nearly £8m of its reserves to balance the books.

“Some households are finding it very tough at the moment, so what we’ve decided to do is to just go for a three per cent increase, subject to the consultation, which is around the level of inflation.

“With that three per cent we can deliver a balanced budget without any cuts to frontline services.”

Coun Hill said: “We feel it’s important we protect our frontline services as we know many residents rely on our support.

"The government seems keen for us to raise council tax by more than that, but we know this remains a difficult time for many families and have chosen to draw on our reserves instead.

“We’re able to do this thanks to our careful financial management over the years, which means that Lincolnshire County Council remains in a stable position compared to other authorities. In addition, despite the proposed increase, our council tax rate is set to remain one of the lowest in the country for a shire county.”

He described it as “a challenging time” and “a frustrating time,” but assured that “as always we will deliver a balanced budget all while trying to protect our council tax payers.”

Coun Colin Davie, portfolio holder for economic development, environment, and planning, shared Coun Hill’s sentiments regarding the direction of central government, arguing it painted a “bleak picture going forward.”

“This is a government that does not like rural England,” he said.

Residents are being invited to share their views on the council’s initial budget proposals for the 2025/26 financial year by completing the survey available at www.letstalk.lincolnshire.gov.uk before January 28.