Portsmouth City Council cabinet approves budget 2026/27 and council tax
The budget will go to full council on February 24
Portsmouth City Council’s cabinet has backed a budget which relies on a 4.99 per cent council tax rise, alongside £10.3m in government support.
Portsmouth City Council’s Liberal Democrat cabinet has approved the authority’s budget for the next financial year, 2026/27, which starts on April 1.
For that year, the council has estimated additional spending of £16.2m, primarily due to high demand for adult and child social care services, alongside inflationary pressures and special educational needs.
The council intends to cover this excess spending through £3m of savings, a 4.99 per cent council tax rise and government funding, provisionally estimated to be £7.9m.
However, Chris Ward, the council’s finance and resource director, said the government’s cash will amount to £10.3m, £2.4m higher than what was anticipated, and will “tail off” to £1.6m by 2028/29.
He described the annual budget as “structurally balanced” as the authority is “spending within its means and not having to draw on reserves to supplement the gap between excess spending and level of funding the council receives”.
Looking ahead, the council projects a £3m deficit by 2029/30, requiring £1m of savings per year from 2027/28. The council also states forecasts can vary by plus or minus £2m per year.
Councillor Darren Sanders asked about the local impact of the government’s pledge to write off 90 per cent of deficits related to Special Educational Needs and Disabilities (SEND) in the current financial year ending March 31.
Mr Ward said the council is not expecting a deficit at the end of 2025/26, but is expecting a £4.5m deficit in 2026/27 which could grow in 2027/28, up until March 2028 when central government takes on responsibility for SEND funding.
He added that the council could still pay a large sum if the government continued to write off 90 per cent of incurred SEND deficits up to that point.
Councillor Steve Pitt, leader of the council, said that using current figures that deficit could be around £13m, which puts the “couple of million we got” from government “into perspective”.
Local Government Reorganisation (LGR)
LGR is a national agenda set out by the Labour government. It aims to streamline local government by creating larger authorities that provide all services to populations of around 500,000 people.
This would replace the current two tier system in most of Hampshire, where services are shared between the county council and smaller district and borough councils.
Mr Ward said that a new authority, which could involve Portsmouth merging with Gosport, Fareham and Havant, would have a £3m deficit when it is created in April 2028.
LGR could incur a cost of £15m to Portsmouth just to implement it, based on a population share of the total cost to Hampshire, which comes at £132m.
Cllr Pitt added that the new greater Portsmouth authority could start with a £67m deficit from day one, due to inheriting deficits from Hampshire County Council, which oversees a share of services in Fareham, Gosport and Havant.
He said that sum is comparable to a deficit seen when Somerset council was formed in April 2023; “a problem they still haven’t fixed”.
Your council tax bill
The council expects to make £5.4m from raising council tax, two per cent of which will go to adult social care costs. Council tax is expected to represent 43 per cent of the council’s funding next year.
According to council reports, Portsmouth has a comparatively low tax base and council tax charge, as it “receives circa £10.7m per annum less in council tax than the average Unitary Authority within its statistical neighbour group”.
With the 4.99 per cent increase, Band B residents can expect to pay £1.36 more per week and Band D residents can expect to pay £1.75.
The budget will go to full council on February 24.