Sutton Council Proposes Maximum Council Tax Rise Amid Funding Crisis

Sutton Council has announced plans to increase council tax by the maximum allowable amount of 4.99% for the 2026/27 financial year, alongside implementing £13.3 million in budget cuts. The Liberal Democrat-led authority cites what it describes as "unfair" government funding reforms and escalating costs for essential services as the primary drivers behind these difficult financial decisions.

Financial Pressures and Proposed Increases

The proposed council tax rise comprises a 2.99% general increase plus an additional 2% levy specifically designated for Adult Social Care expenditure. This represents the highest percentage increase a local authority can implement without triggering a public referendum. If approved during the March budget meeting, this adjustment will see residents in Band D properties paying £2,378.64 annually—an increase of £108.92 compared to the previous year.

Council officials have outlined a concerning financial trajectory, projecting that by 2029, local taxpayers will be funding 66.4% of the council's spending power, a significant increase from 48.3% in 2010. This shift represents what the council terms a "new financial reality" where government funding fails to match inflation and growing service demands.

The Impact of Fair Funding Reforms

The council attributes much of its financial strain to the government's Fair Funding Review, scheduled to take effect in April. While outer London boroughs received an average funding increase of 8.6% from this review, Sutton was allocated just 3.2%—one of the lowest settlements in the region. Officials estimate that, when adjusted for inflation, funding per person in the borough will be 21.3% lower in 2028 than it was in 2010.

Councillor Sunita Gordon, Lead Member for Finance, expressed strong criticism of the government's approach: "The government's latest funding review is neither fair nor sustainable. It has resulted in significant cuts to Sutton's funding. Rather than funding these services properly, they have left us in a position where the only way we can raise money for these essential services is to put Council Tax up by the maximum amount."

Rising Service Demands and Budget Shortfalls

Beyond funding challenges, Sutton faces escalating demand for critical services:

Temporary accommodation costs for homeless families have created a £2.45 million budget pressure
High-cost care packages for vulnerable adults have increased by 17% in just one year
The borough's aging population continues to place additional strain on social care services
Special Educational Needs and Disabilities (SEND) provision requires high-cost external placements, creating a projected £22.28 million shortfall in the schools budget by 2025/26

Despite identifying £13.3 million in savings to balance the immediate budget, the council projects a cumulative budget gap of £34.5 million by 2029. This represents the shortfall between required service funding and expected income.

Political Responses and Future Plans

Council Leader Barry Lewis acknowledged the challenging position: "Looking to the years ahead, the council will need to find longer-term solutions to the impact of government cuts and the continued rise in demand for essential services. To tackle this, the focus of the council must now turn to a new transformation programme to fundamentally reshape how we deliver services and ensure long-term financial stability."

The council has committed to continued investment in local infrastructure, including:

Over £10 million for social housing and estate regeneration projects
Improvements to roads, schools, parks, and green spaces
Enhanced support for SEND students
Development of affordable housing through projects like Chalk Gardens

Conservative councillor and Greater London Authority member Neil Garratt offered a contrasting perspective: "At the election, Lib Dems told people that removing the Conservative government and our local Conservative MPs would make life better, but Labour is proving a disaster for Sutton. We're now left counting our losses, as local services will suffer brutal Labour cuts. As a minor party, Lib Dem MPs in Parliament are bystanders with no power to stop this."

The council maintains that despite these financial pressures, it has set a balanced budget for 2026/27 and remains committed to delivering frontline services while investing in community improvements. The proposed measures represent what officials describe as necessary steps to address what they view as systemic underfunding and growing service demands in the borough.