Call for more funding as council faces £1.78m gap

Councillor Stephen Sweeney said Newcastle-under-Lyme Borough Council was facing financial pressures

A local authority has called for more funding from the government to help plug an expected £1.78m gap in its finances in 2026/27.

Newcastle-under-Lyme Borough Council in Staffordshire said it was facing increasing budget pressures and a predicted £1.5m loss under ministers' plans to reform the business rates system.

In a letter to Chancellor Rachel Reeves, the Conservative-led authority's deputy leader Stephen Sweeney said the changes would see the council "lose out" at a time where demand for services was increasing.

A government spokesperson said it was in the process of overhauling the funding system and had made £69bn available to boost finances in local authorities.

Sweeney said the amount it spends on temporary accommodation for homeless people rose to £930,000, about 5% of the total budget, which he said was driven by increasing demand and rising costs.

"We have been dedicated in controlling our costs to ensure value for money, but it's also essential that we receive a fair settlement from central government," he said.

The authority has written to Chancellor Rachel Reeves to call for more funding

The council's leader Simon Tagg said the authority had made more than £10m-worth of budget savings since 2018, while "focusing on delivering good quality services for residents".

He said the "recalculation of business rates" would affect its budgets and the council was preparing as best it could so residents "don't suffer the consequences".

'Consultation on funding'

The government said it was in the process of overhauling the "outdated" way councils were funded and about £2bn would be redirected to places with the most need.

Under its Fair Funding Review, changes would be made to how government grants and business rates are distributed between local authorities.

Responses to the review are currently being considered and further details will be published along with a provisional settlement later this year.

A government spokesperson said: "We have already made over £69bn available this year to boost council finances and are committed to changing the outdated way they are funded.

"We will be responding to our consultation on allocating funding more fairly, in due course."

This news was gathered by the Local Democracy Reporting Service, which covers councils and other public service organisations.