The Council is currently managing significant pressures on its budget. Demand for adults’ and children’s social care continues to rise sharply, and the cost of providing home‑to‑school transport for children and young people with special educational needs has increased substantially.

Today, around 80% of the Council’s entire budget is required to deliver these essential services.

At the same time, day-to-day running costs have risen with inflation, making delivering other critical services more expensive.

Like any household managing its finances, the Council has four main options:

  • Reduce spending
  • Increase income
  • Use savings (reserves)
  • Borrow money

To respond proactively to our financial challenge, we are taking forward a balanced approach that uses all of these options responsibly.

Taking decisive action to reduce spending

We have been working for several years to reduce costs and operate more efficiently. This includes:

  • Streamlining staffing structures
  • Being less reliant on agency workers
  • Reducing the number of Councillors
  • Driving better value through procurement and contracts
  • Using technology to modernise and improve service delivery

This work is continuing, with £5.158m of further savings already identified for 2026/27. A detailed financial plan is also in place to drive further savings in subsequent years.

We are also transforming how services are delivered to bring long‑term financial benefits. This programme has already delivered around £3 million in financial benefits, and we expect this to rise to over £6.7 million by the end of 2026/27.

More information about this work is available here.

Bringing in more money

Each year, the Council receives funding from Government through the local government finance settlement. This year, the national Fair Funding Review significantly changed how funding is allocated – the settlement covers the next three-years.

The shift from yearly settlements is welcomed as it allows for longer term service planning.

The Council had expected the Fair Funding Review to increase funding for Halton over the next three years, however, late changes to the formula mean our allocation will be around £16 million lower than anticipated.

Aside from Government funding, Council Tax is the Council’s main source of income.

Halton currently has the fourth lowest council tax in the North-West.

A request was made by the Council to Government for an exceptional council tax increase of 3.00% above the standard 5.00% threshold – this would have raised approximately £2.056 million per year for essential services and brought Halton’s Band D Council Tax in line with the national average.

This request was not approved by Government. Had it been, the increase would also have had to be considered through the Council’s budget‑setting process, with a final decision made by Full Council

Government has however provided additional grant funding for a number of Councils in particular need, including Halton. As a result, Halton will receive an additional £11.9 million spread over the next three years.

Elsewhere, we are looking for further opportunities to generate additional income by selling services commercially and working to recover money that is owed to the Council alongside supporting people to reduce debt arrears.

Using Our ‘Savings’

The Council’s reserves – our financial “savings” – have helped us manage rising costs and increasing demand in recent years. While the Council does still have reserves, they are now at the minimum level, and most are earmarked for specific purposes or relate to grant funding for particular projects such as highways schemes.

This means we no longer have sufficient unallocated reserves to bridge the budget gaps we are facing in the short and medium term.

Using borrowing to support essential services

Despite continued savings and service transformation, borrowing is now necessary to meet the day‑to‑day running costs of essential services we provide to residents. The Government has granted permission for the Council to do this through Exceptional Financial Support (EFS).

Although once rare, EFS is now being used by an increasing number of local authorities facing similar pressures.

It is important to note that EFS is not a bailout. Any borrowing must be repaid, with interest, within 20 years.

For the 2026/27 budget, the Council will require £34.966 million of EFS.

Continuing to invest in Halton’s future

Despite these current challenges, we remain fully committed to delivering the priorities shaped by our community and set out in our Corporate Plan.

To do this, our budget for the next financial year includes nearly £45 million of investment to support regeneration, create new opportunities for local people, and improve the services that matter most to residents.

This investment will fund improvements such as upgraded playground equipment, enhancements to Halton’s open spaces, new litter bins, upgrades to street lighting and investment in our schools and town centres.

There is no doubt that this continues to be a challenging period, with rising demand for social care placing significant pressure on the Council’s budget. However, we are taking firm and proactive action to manage these pressures through our ongoing transformation work and strong financial controls.