Council warns of major financial challenges

A county council is warning of potential cuts to services after being told of a substantial reduction in central government funding.

Oxfordshire County Council will look to make an additional £5.4m in savings ahead of a meeting to agree its budget in February, including the potential of £1.5m of cuts to services.

It comes after the government changed the funding formula for local authorities, awarding more money towards deprived areas, reducing Oxfordshire's share for the next three financial years.

Councillor Dan Levy, Oxfordshire County Council's cabinet member for finance, said there would be "very real impacts" on budgets and services.

As part of the changes to the government funding, local authorities have now been told how much they will receive over the next three years.

For Oxfordshire, this shows further year-on-year reductions, with the council facing £14m of savings for 2027/28 and £27m for 2028/29 - the first year of local government reform for the county.

Levy said: "Money is being redistributed away from Oxfordshire and other areas on a large scale by the government. There will be very real impacts on our budgets and our services in future."

"While we respect the government's desire to put extra money into areas of the country that have higher levels of deprivation, we do not think this should be at the expense of Oxfordshire and its residents," he added.

Included in the new funding formula is an assumption that the local authority will increase council tax by 4.99% each year, for the next three years.

Levy said the council has now, in effect, lost the ability to set this amount itself, describing it as "both financially difficult and hard to square with local accountability and choice".

The county council will now look at ways to cover the deficit for the next financial year, including the potential of £1.5m cuts to services, options to use council reserves and reducing the money it puts aside for annual pay inflation.

Alison McGovern, Minister for Local Government, said: "It's simply wrong that where you live determines the quality of services you get and ultimately determines your life – from birth to old age.

"These reforms end that injustice. By using up-to-date data and targeting funding to areas with greatest need, we're reversing years of unfairness and unlocking opportunity in every part of the country."