Reform council no longer needing rainy-day cash to help budget

In January, the Reform-led authority announced it would be using £4.2 million of its reserves to set a balanced budget in the 2026/27 financial year.

All councils hold cash reserves back for times of need, allowing them to better respond to uncertainty around future government funding and increasing demand and costs in adult and children’s services.

The county council currently has £36 million in spare money – not allocated for other things – in its reserves. It is from this pot that the £4.2 million would have been drawn from to balance next year’s budget.

But the authority has ended up with an extra £4.3 million from Westminster following its final local government settlement announced on February 9th.

This cash boost was part of one large grant from the government after changes to business rates, and means the Reform council will not need to call on reserves to balance its budget for the next financial year.

Although not bound by regulations, many councils, including Middlesbrough and Nottingham, deem 7.5 per cent of their authority’s entire revenue budget to be a healthy amount of reserves.

Nottingham City Council has around £63 million in its unearmarked reserves, which is around 18 per cent of its entire budget.

Nottinghamshire County Council’s entire budget is over £875 million, and 7.5 per cent would be more than £65 million in reserves. It actually has just over half of this in its reserves.

The Local Government Association (LGA) says councils often come under pressure to use reserves to plug ongoing budget gaps, “but using reserves is not the solution to the financial pressures councils are facing”.

Reform recently announced the lowest council tax rise in a decade for Nottinghamshire residents at 3.99 per cent.

Council leader, Mick Barton (Ref), previously told the Local Democracy Reporting service: “Why tax the public again? The Government is doing that.

“Just because you can, it doesn’t mean you have to do it. It is a hard decision, it is quite a few million quid you’ve got to find, but we think it sends a message out that we are trying to act on the people’s behalf, and we don’t think it is right to keep taxing them.”

By 2027/28 the council is hoping it will have a £14.3 million surplus in its budget, rising to £31.7 million in 2028/29.

This is subject to Reform’s multimillion-pound efficiencies programme, which began in June 2025, being successful.

The authority has so far identified £44.2 million in “efficiencies” across the council and its services.

So far, little detail has been given about where these efficiencies are coming from, except for the reduction in agency staff, which has resulted in savings of £1.6 million.