'Extremely difficult decisions' needed - Isle of Wight council's financial crisis
Warnings the funding gap could reach £60M in a few years
Last updated 13th Jul 2026
A stark warning has been issued over the bleak financial future of the Isle of Wight Council.
‘Some extremely difficult decisions’ will be required to address a funding gap which could reach over £60 million in a few years’ time, a senior officer has said.
In a bleak update at County Hall yesterday (Thursday, July 9), deputy chief financial officer Adam Richens pointed to a graph forecasting a growing structural deficit for the local authority which he said he ‘saw a lot’ during the ‘austerity years’ of the last decade.
He referred to three main drivers of the shortfall: the rapidly escalating costs of adult social care, the doubling in cost of the council’s waste contract and cuts in government funding which will get ‘significantly worse’ in the following two years.
Presenting the graph to the policy, finance and resources committee, Mr Richens said: “That (funding) gap is £20 million for 2026/27. It will double in the next year to £40 million if we leave it unchecked.
“It will then grow over the three-year period so by the time you get to 2029/30, you have a structural deficit of £66 million.
“I’ve been a Section 151 officer for quite a number of years and I saw that graph a lot with regards to expenditure going up but funding going down, staying the same, during the austerity years.
“That was a common graph that was presented up and down the country with regards to the impact of austerity.”
He said the council is ‘back into that position’ in terms of the future, left unchecked.
The officer continued that given the structural deficit, County Hall ‘rightly’ applied to government for Exceptional Financial Support (EFS) which he claimed was the ‘only way’ to set a ‘responsible and lawful’ budget for 2026/27.
EFS gives councils government permission to use capital budgets, borrowing or asset sales to fund day-to-day spending, according to the Institute for Government.
Mr Richens said the EFS process is akin to an ‘emergency government bailout’ and that Whitehall has given the Isle of Wight Council an in-principle decision for £12.9 million of EFS in 2026/27 only.
The EFS will only be drawn upon if necessary. He emphasised that the facility amounts to borrowing which would need to be repaid, including interest, and is not a government grant.
Current council forecasts show potential EFS borrowing of £175.3 million over a four-year period from 2026/27.
Whitehall expects the council to take ‘all reasonable steps’ to manage financial pressures locally and develop a ‘clear’ service improvements and transformation plan to assist a return to financial stability, Mr Richens said.
He said an independent chair has been sourced for a Transformation and Improvement Board.
Moving to next steps, the officer gave three pieces of advice: management must be within the budget County Hall set for 2026/27, all reasonable steps must be taken to reduce the £12.9 million EFS debt due to be taken out for 2026/27 and address the underlying structural deficit which for 2027/28 is £39.7 million.
“That will require some extremely difficult decisions to be made in this chamber,” he added.