South Staffordshire residents' council tax rise on the cards as authority faces its own demise

The increase proposed by South Staffordshire Council would mean band D households would pay £150.34 in 2025/26.

The authority is currently preparing its budget for 2026/27, as well as a Medium Term Financial Strategy for the years up to 2030/31. But the level of funding the council is due to receive from the Government remains uncertain for now, councillors heard at an Overview and Scrutiny Committee meeting this month, and authorities across the country are facing changes to the way Government funding is distributed.

To manage the impact of the funding changes, the Government will bring in transitional arrangements over a three-year period, a report to the committee said. These aim to phase in the changes gradually, limiting annual reductions or increases to avoid sudden financial shocks, and apply minimum funding levels so that councils experiencing significant losses receive temporary protection.

South Staffordshire District Council itself is set to be abolished in 2028 as part of local government reorganisation across England. The current county, district and borough councils in counties Staffordshire will be replaced by a unitary authority system and future arrangements are currently being considered.

Rebecca Maher-Griffiths, the council’s finance director and S151 officer, told members of the Overview and Scrutiny Committee: “While we are in a stronger position than we had expected as a council, we are still losing a significant amount of funding over the next three years as a result of the Fair Funding Review (a new methodology for distributing central government funding to councils) and the business rates reset. The final settlement isn’t expected until the week commencing February 9 which is very late – later than I’ve ever known it to be and especially late for any significant changes to funding for 2026/27 when councils are expecting to get their budgets approved.

“Although we are being protected until 2028/29, there is a potential cliff edge in 2029/30 when our funding may reduce to the level the Fair Funding Review has worked it out to be. Although we know the council won’t exist in its current form at that point in time, we know that the new unitary authorities will be allocated the combined allocations of predecessor authorities and there are at least three Staffordshire authorities that are receiving protection at a negative funding floor.

“If that cliff edge does happen in 2029/30 it could have a significant impact on those new unitary councils. We still have a responsibility to protect residents and prepare for that.

“In terms of the impact of the Fair Funding Review, although we are in a stronger position the underlying outcome is a 39 per cent loss in our Fair Funding Assessment between 2025/26 and 2028/29 for the council. It’s a significant reduction and it’s being phased in over three years.”

Overview and Scrutiny Committee chair Dan Kinsey said: “It strikes me the Government has made an assumption that life was good in South Staffordshire and the streets were paved with gold – which means they’ve not driven here.”

Councillor Penny Allen said: “I think it should have been called the Unfair Funding Review myself. The calculations for winding up the council are very much, I think, dependant on redundancy costs and contract completions.

“I don’t regard the budget being £2m as being enough necessarily for that if people are not re-employed into the new council and the redundancy bill will be very large. If the worst comes to the worst, is there any other fund we can apply for or obtain centrally that could help massage these figures so that we’ve got more of an assurance we can meet the transition?”

Ms Maher-Griffiths responded: “There are opportunities to bid for funding around this, but generally the attitude from the Government is that these costs should be met by the predecessor authorities jointly. I wouldn’t expect that we would be successful if we were to out in for any of that funding at the moment, when the Government looks at our current reserves position and reserves for the rest of Staffordshire, but it is something we can consider as we move forward and understand the costs in more detail.”

Councillor Victor Kelly said: “The spending review doesn’t finalise until February 9. The figures could change for better or worse during that time, so we’ve got to keep our finger on the pulse and hope it gets better for us.”

Council leader Kath Perry said: “Watch this space on February 9. It all could change again, that’s how it’s been, and we still don’t know the final figures.”