Because of its low council tax rates, Lincolnshire could potentially receive less funding for council services in future under new government proposals.
The government is currently consulting on proposed reforms to the way local councils are funded. Under the new rules, authorities that have lower council tax rates would receive less in government grants than those with higher bills.
Cllr Martin Hill OBE, leader of Lincolnshire County Council, said: “This proposal from the new government could further disadvantage Lincolnshire residents.
“Historically, rural areas have received less funding than their urban counterparts. In fact, we estimate that Lincolnshire would get an additional £120m each year if it received its fair share of national funding.
“The government also recently decided to cut our £9m Rural Services Delivery Grant and introduced a Recovery Grant, from which Lincolnshire received nothing. Extra money from this new grant was instead handed to big cities, such as Birmingham and Leeds, compounding the problem of rural underfunding.
“There are now plans to penalise responsible local authorities, like Lincolnshire County Council, that have worked hard to keep council tax rates low for their residents, and instead reward those that have chosen to hike their tax rates to balance their books.
“We know that many families are still struggling with the cost of living, so we are reluctant to pass on the burden of this underfunding to our residents and instead will look to take the tough decisions necessary to keep our council tax down. It now looks like we could be punished for not raising council tax rates to the maximum, when we are concerned about putting our residents’ needs first.
“Further reducing our funding would place even greater pressure on the vital services our residents rely on.”
Lincolnshire County Council is currently consulting with residents on council tax proposals for 2025/26. The budget proposal considers three options:
- Option A is a 2.99% increase and use £9.7m of reserves / additional savings
- Option B is a 3.99% increase and use £5.8m of reserves / additional savings
- Option C is a 4.99% increase and use £1.8m of reserves / additional savings
In recognition that it’s still tough for residents, the council’s Executive have said that their preferred option is to increase council tax by 2.99% and use £9.7m of reserves and/or further savings (option A).