Maximum council tax rise planned as more cuts loom

Leicester City Council has said it plans to increase its share of council tax by 5% from April and warned of a "squeeze" on public services.

The Labour-run authority has started the process of setting a budget for 2026-27 but has predicted its spending will outstrip its income by £15m.

The council said growing demand for social care for vulnerable adults and children was a major factor in driving up costs and it would need to again use its reserves to balance the books.

"I'm afraid there will be more hard grind and squeezes to services coming," said city mayor Sir Peter Soulsby.

The proposed council tax rise will see the bill for a Band D property in the city rise from £2,020.85 to £2,127.87.

However, the majority of homes in Leicester are smaller and Band A property bills will rise from £1,347.23 to £1,414.58.

The increase is the maximum allowed under a government capping scheme.

Soulsby added: "Things are not looking as bad as they have in the past.

"Two years ago it was looking like the city council was about to go off the financial cliff-edge.

"The present government has recognised funding has to be redistributed to areas like Leicester.

"That process is beginning but after 14 years of austerity, we have a major black hole in our budget.

"In three years' time, our reserves will have effectively run out and that means we have difficult work to do trying to hold down the cost of social care while squeezing all the other services we provide.

"That includes everything from parks to highways and refuse collection.

"In all of those, we will inevitably have to look to reduce our spend."

Leader of the council's opposition Conservative group, Hemant Rae Bhatia, said: "People getting a 5% rise in the council tax bill are going to find it tough.

"It's all about priorities and I'm not sure this council is getting them right."

The council said it had a discretionary council tax support scheme to help people struggling with their bills, which saw £471,000 shared between 855 homes, between April and September.

The council has also said it plans to spend £82.8m on capital schemes next year including £50m on temporary accommodation for homeless people

The council said it expected the government to provide full details of its 2026-27 financial settlement in the coming days and councillors will debate the proposals in February.

The government has been contacted for comment.

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