Across the country, Reform UK councils that came to power in May 2025 are discovering the real challenges of providing local and statutory services on a frayed shoestring. Many appear to have been forced to conclude that substantial council tax rises may be necessary.
Budget under pressure
Worcestershire County Council, which is run by Reform as the largest party in a no overall control authority, is consulting on options to balance its 2026/27 budget. It is already looking to the public for ideas on how to make further savings. They’ll struggle, with adults’ and children’s social care cited as the most significant challenges.
The consultation, open until 1 November 2025, lists various possible areas for spending cuts, including special educational needs provision, infrastructure, libraries, and public health. It goes on to discuss options for increasing council tax by up to 10%. Any rise above 5% would require central government permission. It remains to be seen how much support these measures will win from Worcestershire residents, and this part of the consultation reads more like a test balloon.
The document accompanying the consultation identifies the highest growth areas in expenditure over the last three years as adult social care services (£63mn), children’s services (£59mn), and home-to-school transport (£30mn). It describes a total growth in expenditure over the period of £195.1mn as part of an overall annual budget exceeding £1.1bn.
Against the backdrop of an ageing population, socioeconomic stagnation, and a prolonged recovery from the Covid-19 pandemic, councils of all political make-ups have long struggled to balance their books. Many are looking to council tax rises and capitalisation directions from central government to make ends meet.
Councils are funded by a combination of council tax, government grants (some ring-fenced for particular purposes), income from services, and business rates. Options to manage shortfalls and overspends are limited, and councils are restricted on council tax rises, business rates, and charges for services.
Local Government: the poor relation
The pressure on local authority budgets is nothing new. Between 2018 and 2024, 11 Section 114 (bankruptcy) notices were issued by local authorities, including Birmingham City Council, a neighbour of Worcestershire, and Croydon Borough Council (three times).
How have things got so bad? Local authority spending power was cut sharply in the early 2010s by the then-coalition government’s austerity measures introduced in response to the 2008 global financial crash. Between 2010/11 and 2017/18, it dropped by around 29% in real terms – a heavy blow from which many councils have yet to recover, remaining some 10% lower than 2009/10 levels
Among these cuts, disadvantaged areas experienced the deepest reductions in spending power due to their higher reliance on government grants. So although grant funding was cut by a universal amount of around 49% in real terms, this made up a greater proportion of more deprived local authorities’ budgets, leaving a bigger hole.
This is coupled with a growing, ageing population which is associated with increased demand for public services, particularly in social care. The Covid-19 pandemic also necessitated over £4bn in extra spending by local government in 2020/21, exacerbating the financial pressures that continue to influence local tax decisions today.
It’s interesting to reflect on the balance of the supply (central government funding) and demand (cost of services) in this predicament. Of late, the demand side has received most of the attention, particularly regarding the pressures of immigration. It is rarely, if ever, mentioned that local government continues to be underfunded by central government compared with pre-2010 levels.
Local government reform
As local authorities grapple with funding issues, the government is considering reforms aimed at remoulding local governance, including the English Devolution and Community Empowerment Bill, which is currently at committee stage in the House of Commons. The government says the Bill aims to build “deeper and wider” devolution of powers across England, bringing decision-making closer to the places affected.
To achieve this, local governments are to be reconfigured across England. One aim of the reconfiguration is to abolish two-tier authorities, so there will no longer be a county council and a district council sharing different aspects of local area management. Instead, a unitary authority will be responsible for all local services for a population of approximately 500,000. Local authorities are required to submit full proposals for reorganisation by the end of November 2025.
The current favoured approach for Worcestershire is a unitary authority across the county to serve around 620,000 residents, abolishing six district, borough, and city councils. A rival option would be to create two Worcestershire authorities, North and South.
At first glance, removing tiers of government should reduce duplication and waste, making council tax cheaper. However, a leaked report revealed that in some districts, residents could face increases of around £400 in council tax after a “harmonisation” exercise under a new unitary authority. Added to the proposed tax rises under consultation, the Reform-planned hike of up to 10% could leave Worcestershire residents facing a turbulent and costly transition.
Promises, promises
Council tax hikes are likely to play badly with newly won Reform voters, who were promised reduced waste and low taxes in May’s local elections. Alongside Reform’s recent U-turn on their national manifesto pledge of £90bn in tax cuts, it’s starting to look as if promises were made that cannot be kept. May seems like a long time ago, but some will still recall Zia Yusef’s ebullient DOGE-like pledge on cuts to the BBC’s Laura Kuenssberg, following their local election success.
Perhaps, after being subjected to 15 years of various forms of austerity, the anticipated wastefulness of local government simply has not materialised. Since the early 2010s, ‘back-office’ functions have been successively eliminated in favour of supposedly lean frontline services, which are somehow expected to be well managed without the need for actual managers.
There’s nothing left to provide the low-hanging fruit for Reform to pluck to fund their vote-winning tax cuts. Then again, perhaps the much-trumpeted tax cuts were only ever meant for the wealthy.
The scale of the challenge facing local authorities is significant, and it is incumbent on politicians and candidates alike not to make false promises of easy solutions to gain votes. As some Reform-led councils are now discovering, after the glitz and glow of an election win always comes the serious work of governing.
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