Council bosses have been asked if a 4.99 per cent Council Tax rise has effectively been “mandated” by Government as part of Bradford Council’s financial bailout.
Next month the Council will vote on its proposed budget for the 2026/27 financial year, and the leading Labour group’s proposals include a 4.99 per cent Council Tax rise.
But at a recent meeting of the Council’s Executive, finance bosses were asked if the current financial support the Government is providing to Bradford Council means there no way to avoid this rise.
In 2024 cash strapped Bradford Council was granted “exceptional financial support” by Government to stave off bankruptcy.
The support allows the authority to borrow money to fund its day-to-day services – something Councils are not usually allowed to do.
When it was issued is was assumed the Council would need to borrow hundreds of millions of pounds to become financially sustainable.
This loan – called a “capitalisation direction” – would need to be paid back with interest, and came with a slew of conditions, including that the Council sell of millions of pounds worth of assets and make a large number of cuts.
A recent report to the Executive said that an unrelated shake up in how local Councils are funded will help Bradford’s finances, and that the capitalisation direction could be reduced from £570m to £395m.
The report says that the Councils’ financial plans for the coming years rely on several “key assumptions” including cuts of £50m for 2027/28 and 2028/29 and “£40m each year thereafter,” the Council raising £100m through the sale of assets and “4.99 per cent Council Tax increases each year.”
At the meeting Councillor Mike Pollard (Cons, Baildon) said: “I see from the report that the exceptional financial support is based on the assumption the Council is going to meet Government expectations that Council Tax will be increased by 4.99 per cent.
“Are you suggesting that that rise is effectively mandated for the clearly vital financial settlement to be approved? Even if any budget amendments by opposition parties might suggest a lower Council Tax rise based on savings elsewhere? It does seem a little perverse.”
Bradford Council Leader Susan Hinchcliffe said: “All previous Governments say spending power for Local Government has increased, but that always includes a maximum Council Tax rise. They have always assumed Council Tax will be put up by the maximum amount.
“We’ll still have to borrow £78m next year, so we’re not out of the woods yet, but we won’t have to borrow money the year after.
“We are beholden to Government to show we are on the right track. They will be concerned if we don’t show the financial rigour we have shown so far.
Steven Mair, Strategic Director of Corporate Resources, said: “The Government’s expectation is that we’ll put up Council Tax by 4.99 per cent.
“There are a series of tests we have to pass for the support, and that is to show we are minimising the capitalisation direction and maximising the income we bring in.
“In the longer term it is a matter of confidence. There is an expectation we will do this, and so far the Government are confident about how we’re doing it in Bradford. If we don’t we undermine that confidence.”
Cllr Hinchcliffe added: “We will continue making responsible decisions for the District.
Bradford Council will decide its budget in March.
