Peterborough council set to receive £95m funding boost
It comes as part of the government's Fair Funding Review
Peterborough City Council is in line to receive a boost in funding from the government following a review into council finances.
The government’s Fair Funding Review is backed by a £5 billion boost for local services over the next three years, which will ensure councils are funded based on the latest deprivation data and local need so that communities with the highest demands get better access to public services.
In Peterborough, the recently published local government finance settlement indicates that the city will see £94.9 million more in council funding every year by 2028 than in 2025 – an increase of 42 per cent.
This three-year settlement equates to around £407 extra each year per Peterborough resident.
Reacting to the government announcement, Peterborough MP Andrew Pakes said: “Peterborough has been held back for too long by a broken funding system that simply didn’t reflect the reality on the ground.
“This announcement shows that Labour is serious about backing our city and ending the unfairness that left communities struggling while others pulled ahead.
“It’s a turning point – and it shows what can be achieved when we speak with one voice for Peterborough.”
Peterborough City Council is currently forecast a £6.1 million overspend on its net revenue budget by the year end.
In November, top figures at the council said the extra funding from government could be “transformational” for its finances and place the authority in a much better position come the beginning of the 2026/27 financial year.
Cllr Shabina Qayyum, leader of Peterborough City Council, said: “This is a hugely important moment for Peterborough.
“Our council has worked incredibly hard to stabilise finances after years of cuts, but fair funding has always been essential to securing our city’s future.
“This settlement gives us the certainty we need to plan ahead, protect vital services, and invest in the things that matter most to residents – while also recognising the pressures faced by councils across Cambridgeshire.”
Sam Carling, MP for North West Cambridgeshire, said: “This is exactly what we have been campaigning for – a permanent, fair funding settlement that finally recognises Peterborough’s needs, alongside fairer support for communities across Cambridgeshire.
“For years, our area was short-changed by outdated formulas and a system that took money out of places like ours. This Labour government is putting that right.
“This is the power of Labour MPs working hand in hand with a Labour council – securing long-term investment, not sticking plasters, and setting our area up for success.”
Peterborough City Council’s 2026/27 budget consultation closed last month and it asked residents for their views on raising council tax above the national limit, a proposal only a quarter of respondents supported.
The authority’s budget proposals will now be finalised and considered for approval by full council in February 2026.
Cllr Louise Gittins, chair of the Local Government Association which represents councils, said: “It is good that government has acted on LGA calls to provide multi-year financial certainty to councils and a streamlined funding system.
“While funding levels have risen over the last few years, budget-setting will be another hugely challenging task for many councils again next year.
“An increase in overall funding remains needed to ensure the financial sustainability of councils and our local services.
“All councils need to be protected from real-terms cuts next year and have adequate funding to fully meet spiralling cost and demand pressures.
“Alongside a significant boost in resources, it is critical that government works with councils to reform key services, such as SEND and adult social care, and undertakes a cross-party review of options to improve the wider local government finance system.
“We remain concerned by the number of councils having to use unsustainable emergency bailouts which are a clear warning sign about the financial pressures facing local government.
“Unless sustainable solutions are found to the severe financial challenges facing local government, we anticipate more councils may need Exceptional Financial Support (EFS) in the future.”