Council continues work to cope with government funding cuts

Proposals to close a gap of £5.4m for the 2026/7 Oxfordshire County Council budget have been made by Oxfordshire County Council’s cabinet at its meeting on Tuesday, 27 January.

A major change to the way the government distributes grant money to councils means it and many other local authorities will face real challenges from 2026/27 with more significant reductions then required in the following two years.

Although there will also be a significant number of investments in to budgets for adult social care (£14m), children’s services (£19m), libraries and other services in 2026/7 savings are now also being proposed to ensure a balanced budget.

The council knows that it will need to find further savings of at least £14m in 2027/28 (in addition to the £5.4m in 2026/27) because the government provided funding information for three years. As such there will need to be planning work throughout 2026 to meet this large challenge. Further savings will be needed in 2028/29, the first year of local government reform in Oxfordshire. By 2028/9 the reduction in grant funding is £27.2m.

The proposals will now be debated by all councillors at a meeting of the full council on 10 February.

Councillor Dan Levy, Oxfordshire County Council’s Cabinet Member for Property, Finance and Transformation, said “This year’s budget features a number of positive investments with significant extra money for adult social care and children’s services to cope with demand. However, we have had to propose some savings to ensure budgets are balanced and we are going to start facing real challenges in future years. We need people to hear that message loud and clear.

“The government has cut grant funding and assumed the council will make up most of the difference with maximum Council Tax rises. The effect of this is that we will have to put up Council Tax by 4.99% each year, but a lot of this money will immediately be subtracted by the government and sent elsewhere. This is both financially difficult and hard to square with local accountability and choice.   Even with 4.99% Council Tax rises, the effect will be that Oxfordshire will have less money to spend on services for residents.

“Money is being redistributed away from Oxfordshire and other areas on a large scale by the government. There will be very real impacts on our budgets and our services in future.

“We respect the government’s desire to put extra money into areas of the country that have higher levels of deprivation. However, do not think this should be at the expense of Oxfordshire and its residents.”

Savings to close the £5.4m budget gap in 2026/7

There are proposals to save £3,9m by setting less money aside for pay inflation; assuming more money will be accumulated in bank interest on money waiting to be spent on services during the year and by reducing contingency funding.

The remaining £1.5m is proposed to be from services by way of the following:

• In 2025/26 the council took the unprecedented step of moving to annual gully clearance, backed by £1.5m of new investment, a significant improvement on previous years. Against the challenging backdrop of central government cuts, the council proposes to maintain additional investment while spending it carefully in order to address the most pressing needs and not duplicate or carry out unnecessary clearances. This means an additional £1.2m is still planned, and the capital budget will include a £2m investment in each of 2026/27 and 2027/28 to improve drainage systems that have been found to require major repair after years of neglect
• The council will seek to reduce operating costs by £250,000 in transport services that it provides in adult social care/children’s services/home to school transport etc. The aim is that there will be no negative impact on the end user. This will be achieved by seeking efficiencies with organisations such as taxi and bus companies. A £1 million saving in this area was included in last year’s budget and the overall budget for this area is £43m.
• The council’s adult social care charging policy currently makes a standard allowance for Disability Related Expenditure (DRE) of 35 per cent.  Subject to a full consultation process the council’s proposal is to consider a reduction of the DRE to 25 per cent which would produce a potential in year saving of £500,000. Following consultation, the council will consider next steps and in the event that it decides not to proceed with this proposal, alternative savings will need to be found.
• After reviewing its inflationary pressure Oxfordshire Fire and Rescue can absorb a previously listed financial pressure of £120,000 for personal protective equipment without any impact to the public or firefighter safety.
• The council has a school improvement team that operates in non-academy schools to support improvement in standards. The team will continue to offer support, and schools do pay towards this without covering the full cost. A government grant that helped towards this was withdrawn over the last three years, and the council has substituted this from its own funds. A first move to schools fully paying for the service is planned, which will allow a saving of £100,000. More than half of Oxfordshire primary schools are academies and all but one secondary school and will therefore not be affected by this proposal.
• By paying for some staffing costs out of its capital programme budget for major projects the council can save £150,000 from its day to day revenue budget.