Council braced for further budget savings
Oxfordshire County Council needs to make savings of at least £16m in 2027/28, rising to £22m in 2028/29, as well as achieving all existing savings, to manage cuts to its funding announced by the government earlier this year.
A balanced budget for 2026/27 was set in February 2026 with warnings that future years would become more difficult because of government decisions to change formulas governing the distribution of funding – with some councils receiving more and others less.
More savings will be required if inflation in the wider economy or demand for the council’s services increases the council’s costs beyond existing assumptions built into the budget.
Councillor Dan Levy, Oxfordshire County Council’s Cabinet Member for Finance, Property and Transformation, said: “The situation we are in is not of our making locally. The county council has a long track record of responsible financial management. We have consistently set aside contingency budgets to deal with uncertainty about demand and other risks.
“Our year end position for 2025/26 shows the value of this approach as we have been able to balance our budget and manage the pressures being experienced in our services.
“However, budget changes needed to balance the budget for 2026/27 and future reductions to our funding mean we will not have this level of flexibility again. We also know there are risks in the wider economy – everybody knows from their own household budgets or from running a business that inflation remains a persistent problem in the economy. When prices keep rising this also increases the cost of the council’s services.
“Looking towards setting our budget for 2027/28 we are going to need to plan ahead and look at options to reduce expenditure and make savings so we can balance budgets for services that the council is responsible for to the funding that we expect to be available. People will hear more detail about this in autumn and winter. We will protect frontline services as far as we can.
“We recognise that there are areas of the country with higher levels of deprivation than our own, and it is right that the people in those places receive the support that they need. However, it is disappointing that councils like Oxfordshire will see real terms reductions in grant funding as a result and it leaves us more exposed when extra pressures arise.
“The government also assumes that we would set Council Tax rises at 4.99 per cent each year giving us no real flexibility locally.”
The council’s cabinet will receive a report later this month detailing how service pressures of close to £10m have been managed in 2025/26. In July, the cabinet will be presented with a report setting the scene for the 2027/28 budget process. Updates on the forecast position for 2026/27 will be shared with cabinet throughout the financial year.