Durham County Council has launched a public consultation exercise to gauge public opinion on its MTFP, Council Tax and Budget proposals. The main points of interest, including further cuts to services and a maximum Council Tax increase are set out below in a document produced by the council's Director of Resources. The public consultation runs until Sunday 15 November 2026.
On 16 September 2026, the council published a comprehensive update of its Medium-Term Financial Plan (MTFP) for the period between 2027/28 and 2030/31. Durham County Council's Cabinet has now approved a public consultation on proposals to help address these financial challenges, including options for council tax increases and savings proposals totalling £21.519 million.
The council has for many years operated in a period of significant financial uncertainty and chronic funding shortfalls. The report includes several updated assumptions around rising cost pressures due to higher levels of inflation, continually rising demand for many statutory services and new Government initiatives – in areas such as social care, special educational needs, home to school transport, waste management and environmental services.
Like many other employers, the council's cost base is also heavily driven by increases to the National Living Wage. Last winter, the Government announced funding allocations for the three-year period from 2026/27 to 2028/29. While the introduction of a new funding formula has provided some medium-term certainty by providing indicative funding allocations for the next two financial years, funding has not kept pace with rising costs and increasing demand for statutory services. The Government has also made clear its expectation that councils will increase council tax by the maximum permitted amount over the next two years to help fund these pressures locally – which in DCC's case would be an annual increase of 4.99% per annum. If the council does not apply increases it faces a real terms cut in funding over the next two years, and even with a 4.99% increase applied, this is insufficient to meet the unavoidable cost increases it faces.
Residents are therefore having to bear the brunt of difficult decisions around how the council sets its budgets and how much it must raise from council tax and how it makes savings and efficiencies within the budget. For the four years ahead, the council faces higher levels of inflation and increased service demand for many statutory services, particularly Children and Adult Social Care, Special Educational Needs, Environmental Services and Home to School Transport. These issues continue to impact significantly on financial planning, with the council’s spending pressures largely influenced by matters outside its control, relating to national pay bargaining arrangements and national Government policy, particularly in relation to the National Living Wage and on changes to waste management legislation.
The Cabinet report outlines that the council faces spending pressures of £138.244 million over the next four years. The majority of these pressures relate to essential and statutory services that the council is legally bound to deliver and are relied upon by some of its most vulnerable residents. Central Government grant and local taxation income from increases in the tax base (before any assumed council tax increases) is only projected to grow by £52.027 million over the same period. The council is already committed to making savings of £2.555 million, which were approved by full council in February 2026. This leaves a four-year budget deficit of £83.662 million before it considers any additional new savings proposals and before any council tax increases are applied (of which £23.278 million relates to next year in 2027/28).
To address this budget gap, the Budget report identifies new savings proposals of £21.519 million. These savings follow nearly sixteen years of continuous delivery of savings and efficiencies totalling £301 million to allow it to maintain a stable financial position in the face of government austerity and insufficient central government funding. Of the £21.519 million of new savings proposals, £9.171 million are ready to be delivered if agreed. These relate to a variety of savings for back-office efficiencies, income generation and changes to front-line services. A further £12.348 million of longer-term savings plans are proposed in the September Cabinet report as part of the proposed Changing Together transformation programme.
The Changing Together programme aims to transform and redesign how the council operates as a council and delivers services, making better use of data and insight, technology and digital tools (including the use of Artificial Intelligence), improving efficiency and sustainability, and helping ensure services remain accessible and responsive to residents’ needs. The overarching vision for Changing Together is “to create a modern, confident and financially sustainable council, powered by digital and shaped by the needs of our communities”. Savings proposals developed as part of Changing Together are at an early stage and need more work over the next 12 to 18 months to set out options for services, the potential impacts of these proposals, service benefits and delivery arrangements. Any detailed proposals would be subject to separate consultation before any final decisions are made. However, as will be seen in the report and the consultation, they relate to how the council delivers several of its front-line services in relation to areas such as leisure centres, libraries, local area networks, highways, environmental/street scene and waste management services and community protection. The council also has a very ambitious programme of transformational change relating to investment in digital access. This looks to improve how customers access services and ensure delivery of critical investment in back-office systems.
Even after considering the delivery of £21.519 million of savings, the council will still have a budget shortfall of £62.143 million across the next four years, of which £16.616 million is likely to fall in 2027/28, and £16.471 million relates to the following year in 2028/29. As the council approaches the end of the decade, it will enter another phase of uncertainty around its long-term funding position. Cabinet has made it very clear to officers that they must strive to deliver high-quality services, whilst being as efficient as they can, and to deliver value for money for residents and businesses.
Without any further council tax increases (or limited increases below the annual 4.99% recommended increase by Government) the council will have to consider more substantial savings over and above the £21.519 million set out in the report. At this stage, MTFP planning does not factor in any council tax increases, but the resultant deficit is unsustainable so either council tax increases will have to be applied or additional cuts to services will need to be implemented, as the council must set a balanced budget. The report and consultation documents set out the impact of council tax increases at various levels each year. The consultation asks for views on a range of council tax increases, including a 0%, 1%, 2% CPI-based, 3%, 4% and 4.99% rise. Decisions on council tax increases have a material impact on the council’s budget shortfall.
The council may need to consider the use of reserves in 2027/28 to balance the budget, but this approach can only be a temporary measure, with more long-term options needing to be identified to address budget shortfalls. Every 1% increase in council tax raises an additional £3.15 million for the council, and this has a significant impact on its funding position. If the council does not look at options to raise council tax, up to 4.99% each year over the next four financial years, the scale of savings needed to make over and above the existing proposals of £21.519 million will increase further.
The consultation exercise explains the size of the financial challenge the council faces. It outlines which areas the £21.519 million of new savings proposals relate to and distinguishes between savings that could be implemented now, and those which would require more detailed planning and further rounds of consultation under the Changing Together programme. It also asks for preferences and views on the options for council tax increases.
The consultation commenced on Monday 21 September 2026 and will run through to Sunday 15 November 2026. The results of the consultation will be presented to Cabinet on 20 January 2027 and 10 February 2027, as part of the Cabinet’s final budget deliberations. Full council will also receive a detailed budget report to approve the 2027/28 budget on 24 February 2027.
Comments can be recorded by email at:
- via the council's public consultation portal at: Project: Annual budget (2027/28) Durham County Council












