Council warns of £27m black hole over funding cuts

Councillor Peter Stoddart says the government's funding proposals for Herefordshire are "deeply disappointing"

Council bosses have said they are "deeply disappointed" by proposed changes to government funding for the county, which they say could affect services.

They said independent modelling suggested they would lose £27.3m in central funding in the 2026-27 financial year - equating to more than 10% of its current net annual budget.

The government said its plans were designed to make local authority funding across the country fairer and "fit for the future".

Peter Stoddart, cabinet member for finance, said it would mean the county would receive "a disproportionately low share of national funding".

This, he added, would be "despite facing service demands as complex, if not more so, than those of other councils".

The local authority said it had made more than £40m of savings in the past five years, by tightening spending, but would need to take decisive action to continue balancing the books.

The potential funding shortfall from next April "will now require savings and efficiencies over twice those of previous years", Stoddart said.

"This pressure could become more intense over the next three years," he warned, due to funding settlements now covering multiple years.

"Unlike some councils that receive government support despite financial failings, Herefordshire could be penalised for its sound stewardship of public resources," Stoddart added.

'Unsustainable gap'

He said the council would need to prioritise infrastructure, roads and opportunities for investment and skills to help attract growth, as well as prioritising services for the most vulnerable.

Rising demand for adult social care, special educational needs provision and temporary accommodation, led to an "unsustainable gap" between incomings and outgoings, he added.

The county had already faced losing its £7m rural services delivery grant, which was cut last year.

Herefordshire Council said the current funding formula did not take into account the extra costs of delivering services across a sparsely populated, rural county.

The local authority said it received a below-average amount of council tax per household, despite having increased rates by the maximum level in consecutive years.

The government, however, said it wanted to "fix the outdated way local authorities are funded to make it fairer and fit for the future, so local leaders can deliver the vital public services their communities rely on."

A consultation on the plans closed on the 15 August, with final proposals due to be published later in the year.