Nottingham City Council is proposing a 3.5 per cent increase in its element of council tax and a balanced revenue budget for 2026/27 as part of its draft Budget and Medium-Term Financial Plan, which will be considered by the Executive Board on 24 February before a final decision by Full Council in early March.
The plan sets out a net General Fund budget requirement of £419.9 million and forecasts a small surplus of around £1.1 million for the coming financial year, following several years in which the authority faced significant financial pressures and government intervention. The council says the balanced position relies on delivering all proposed savings and increasing council tax, without which it would not meet its legal duty to set a balanced budget.
Under the proposals, Nottingham City Council’s share of Band D council tax would rise from £2,262.88 to £2,342.08 — an increase of £79.20 a year — made up of a 1.5 per cent core rise and a 2 per cent adult social care precept. When combined with the provisional police and fire precepts, the overall Band D bill would reach £2,755.39. The council tax support scheme would remain unchanged.
The authority expects to generate £168.8 million in council tax income based on a tax base of 72,063 Band D equivalent properties. Nottingham’s relatively high proportion of lower-band properties continues to limit the income it can raise compared with other areas, meaning a greater reliance on government funding and grants.
The medium-term plan includes £11.9 million of new savings proposals, contributing to £22.1 million of total savings across the four-year period before accounting for previously undelivered savings. Even so, the council forecasts a cumulative funding gap of £37.1 million between 2027/28 and 2029/30 unless further savings are identified, and expects around £50 million of additional reductions to be required over the period.
The council expects to identify at least an additional £37m in savings proposals over the 4-year period, however no new savings are identified or introduced at this point. In practice, it will target £50m and the additional savings will need to be delivered earlier in the MTFP. This is because LGR will likely mean that fewer savings will be delivered in the latter years of the MTFP due to organisational capacity. Recent savings delivery performance suggests that there is reasonable expectation that appropriate new savings can be generated up to a value of £50m based upon a profile of £10m in 2027/28, £20m in 2028/29 and £20m in 2029/30.
The budget assumes no need for Exceptional Financial Support from government, reflecting a shift from recent years when the council required oversight and recovery measures following major financial difficulties and a section 114 notice. The council’s finance officer states reserves are considered adequate, with around £42.1 million in unallocated general fund reserves available as a financial safety net.
Social care demand remains the main pressure on finances, alongside inflation and wider economic conditions. The authority also expects to fund around £28 million of local government reorganisation preparation costs from reserves if structural changes to councils across Nottinghamshire proceed.
The council’s wider capital programme totals £744.7 million, while it has continued reducing historic debt, repaying £287 million of long-term loans during 2025/26 and cutting overall debt significantly in recent years.
Housing finances are set separately through the Housing Revenue Account, which funds the management and maintenance of more than 24,500 council homes. Rents are proposed to rise by 4.8 per cent from April 2026 in line with national policy allowing increases of inflation plus one per cent.
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If approved by the Executive Board, the recommendations will go to Full Council to formally set the budget and council tax before the statutory deadline of 11 March 2026.
