RBWM budget gap could reach £112m by 2030/31 without above-cap council tax hikes

The Royal Borough is asking residents to offer feedback on the council’s financial decisions amid ‘curveball’ changes to Government funding schemes.

A public consultation will run for the next six weeks until January 30.

At a cabinet meeting on Tuesday (December 16), the draft budget for 2026/27 and a medium-term report until 2030/31 were presented to councillors, including assumptions about potential changes to council tax.

The Government allowed RBWM to increase its council tax to 8.99 per cent for 2025/26, above the national 4.99 per cent cap.

In February this year, the council also received permission from the Government for £103million of borrowing through a capitalisation direction – otherwise known as Exceptional Financial Support (EFS).

Today (Wednesday), the council confirmed it has received a 'provisional settlement from government' over what it will be allowed to do for the 2026/27 financial year.

National reports have suggested the council will be granted a council tax rise over 4.99 per cent, although no details have been officially confirmed.

A council spokesperson said: “Having now received the provisional settlement from government, we will be working through the detail and numbers to determine the impact on our budget for 2026/27 and the medium-term.”

For 2026/27, the council will continue to need EFS to be able to set a balanced budget, because without it, a £50million in-year deficit is expected, the meeting heard.

Plans for total savings of £5.8million were also included in the draft budget.

Budget papers show this £50million gap will increase to £112million by 2030/31, if council tax is kept at the usual 4.99 per cent threshold.

The report states the ‘structural gap cannot be closed through savings and income’ and ‘can only be meaningfully reduced’ by council tax increases above 4.99 per cent

Two other scenarios have been modelled: increasing council tax every year, over a three-year period, to bring it ‘in line’ with the national average or increasing council tax by £10 a week for a band D property.

Even if one of these two scenarios played out, the council would still need Exceptional Financial Support from the Government, and the budget gap could still grow to over £60million by 2030/31.

Councillor Lynne Jones (Ind, Old Windsor), the council’s cabinet member for finance, said that even if council tax is increased, the borough’s income will still continue to fall.

But the amount of EFS needed would be ‘significantly lower’, she added.

This is mainly due to changes to the Fair Funding Review 2.0 formula, a scheme meant to direct more funding towards deprived areas.

The Fair Funding calculation will lead to a £6.2million funding reduction in 2026/27 for the Royal Borough, rising to a £29million shortfall by 2030, according to the report.

Cllr Jones reassured residents that any rise above the Government’s threshold will not impact the borough’s most vulnerable residents, who will be protected through additional budget allocations.

She said: “Cabinet have taken responsibility in doing anything possible to make ends meet.

“The legacy of disastrous financial decisions made in the past and the Government’s recent Fair Funding [Review] curveball make it inevitable that we will need support.”

Cllr Julian Sharpe (Con, Ascot and Sunninghill) said that these council tax assumptions ‘disguise the reality’ that a £10 a week council tax increase is a 25 per cent rise in council tax for a Band D property.

Cllr Sharpe said: “This [assumption] is obviously giving huge uncertainty to residents, especially in the run up to Christmas.

“When are you going to be able to decide what you’re going to actually do with this council tax rise this year? [Residents] are all sitting there in abject fear, waiting for you to make a decision.”

Cllr Jones said making any final decisions about council tax rises is ‘out of our hands’ whilst the council awaits a final settlement from the Government.

She said: “Last year, our 8.99 per cent [council tax increase] was the same in cash terms as the councils around us.”

Resident Andrew Hill also asked councillors about the £10million business rate deficit included in the report, of which the council’s share will be £4.9million.

Business rates are the equivalent of council tax for businesses across the borough, with revenue shared between local authorities and central government.

Mr Hill said: “One of the concerns I’ve expressed about the Nicholsons Centre [in Maidenhead] closing is that you lose the business rates from the shops overnight when you start demolishing.”

Rachel Howard, the council’s executive director of resources, said the business rates deficit on the collection fund is an estimate because these rates can be ‘quite volatile’ throughout the year.

She added that the assumed deficit and collection of business rates is not just based on larger developments like the Nicholsons Centre but also on other smaller businesses.