Council approves ‘good news’ 2026/27 budget

Chelmsford City Council has approved its budget for the coming year. It includes a number of service improvements in answer to residents’ requests, and fills a budget shortfall. This is thanks to a better-than-expected Government grant and more income from paid council services.

The budget was hailed as ‘good news’ in a report considered at Full Council, on 25 February.

More encouraging financial outlook

The last five years have seen large budget shortfalls for all councils, caused by Covid-19 recovery, high inflation and real-terms cuts to Government support. This year, the outlook for Chelmsford is more encouraging, for two main reasons.

More Government grant: the city council lobbied the Government for assistance with spiralling homelessness costs. This appears to have helped bring more money than expected from central Government in 2026/27, with an extra £3.4m in funding.

More income: additional customers for services like leisure centres and Chelmsford Theatre, and the introduction of a garden waste subscription (already seen in most parts of Essex), have helped put the council’s finances on an even keel.

Service improvements: this means the council is able to invest in some of the services that matter to residents, helping to make the district cleaner and safer and supporting Chelmsford’s small businesses and the voluntary sector. It also closes a budget gap and provides security as it prepares to hand over to a new unitary authority.

The council’s Cabinet Member for Finance, Councillor Chris Davidson, says the extra funding has helped get things back on track.

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“I said at Cabinet last month that this is a ‘good news’ budget after five very tough years. The good news is mainly down to a change of heart by the Government in increasing their funding to us this year. This has helped to relieve a large part of the extra pressure our finances were under after a very difficult period.

“We believe this is because they have acknowledged the case we put to them that their new funding formula for councils should take account of homelessness pressures as well as deprivation. These costs have risen relentlessly for the city council and although the underlying pressures remain, this extra funding is helping to enable a welcome reset.”

Cllr Chris Davidson, Cabinet Member for Finance

New Government funding formula for councils

The Government is also now providing a three-year settlement for local authorities, helping them to better plan for the future. In 2026/27, the city council will have extra funds specifically ring-fenced for measures to reduce homelessness and additional general funding to improve financial resilience as the council prepares for reorganisation.

This means that payments to fund replacement equipment (put on hold after the pandemic) can now restart, reducing external borrowing and interest payments for the council.

Funding for resident priorities

With more support than expected, the council has also reviewed services under the greatest pressure, and the budget will increase some spending in areas of concern to residents.

Specific funding has been allocated to help make the district’s streets tidier by introducing a replacement for some of the work undertaken by the highways rangers service formerly paid for by the county council, that kept hedges and other foliage from becoming overgrown. The number of dog waste bins the council is able to empty across the district will also increase in the coming year.

Initiatives to reduce anti-social behaviour are proposed to receive funding, along with grants for Chelmsford businesses and charities doing great work in the community. The council’s Leader, Councillor Stephen Robinson, says efforts to improve the council’s financial position and to lobby the Government about local pressures have paid off.

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“After several very difficult years, we finally have an opportunity to improve a number of local services that matter to residents, making our district safer, cleaner and tidier, and supporting hardworking local businesses and charities too. Tough decisions of the recent past and making our case to the Government have put Chelmsford City Council in a much better position for the coming year.

“As we get ready to merge with other councils, this budget will also help put council finances on a secure footing. We can’t be complacent, and as we have learned over the last few years, you never know what is around the corner. But this year’s budget should help set the district and our services on the right track for whatever lies ahead.”

Cllr Stephen Robinson, Leader, Chelmsford City Council

LGR restrictions on spending decisions to start this year

In March, the Government is expected to announce its decision about the configuration of new unitary authority areas in Essex, that will see Chelmsford preparing to merge with other councils. As part of this process, restrictions will be placed on the council’s spending, and so this budget is probably the last to be set by Chelmsford City Council that is not constrained by local government reorganisation (LGR).

Although the precise arrangements are not yet known, during 2026/27, the council is expected to move to a form of joint governance with other councils in the new unitary for any substantial financial decisions. Despite the improved outlook, maintaining financial discipline will be essential in the coming year, as the council begins this process.

Chelmsford City Council’s share of Council Tax for 2026/27

To help maintain this sound position and a responsible handover to a new council, Chelmsford City Council’s portion of Council Tax will increase by 2.97% in the coming financial year - just below the current national inflation figure of 3%. The city council’s increase adds around 13 pence a week (£6.78 a year) to the bill of a typical Band D property in 2026/27.

Although Chelmsford City Council collects all the Council Tax paid in the district, it only keeps 10p in every pound of what residents pay. The lion’s share (around 71p) goes to Essex County Council, with Essex Police receiving 12p, Essex Fire and Rescue 4p and parish-tier councils just over 2p.

Increases across most of the council’s fees and charges have also been kept broadly in line with inflation, with the exception of crematorium charges and shoppers’ car parking tariffs, which have been frozen for the coming budget year.

Find out more

More details about the budget can be found in the report considered by Full Council.

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