Oxfordshire County Council’s Budget Shortfall Reaches £25 Million

Oxfordshire County Council is now facing a budget deficit of £25 million. The council had previously reported a £13.9 million shortfall for the 2025/2026 financial year in October. However, additional financial pressures have emerged, such as the increase in employer National Insurance contributions, which was announced by the Chancellor. Council officials expressed hope that the £1.3 billion allocated to local councils, also announced by Rachel Reeves, would help address their funding deficit. Nevertheless, the specific amount Oxfordshire will receive remains undisclosed. Dan Levy, the Liberal Democrat county councillor overseeing finance, stated he was “anxious” for Oxfordshire to secure an equitable portion of this funding. Levy commented, “We’re waiting for the government to tell us how much money we’re going to get and they’re being very guarded at the moment about that.” He added, “But I’m hopeful that in December when the [local government] settlement is announced we will get a large amount of money from central government, which we need.” The county council’s preliminary budget proposal incorporated an assumed council tax increase of 1.99%. However, the government declared on Thursday that increases would be limited to 3%, unless a referendum was conducted by the authorities, with an additional 2% permitted for councils managing adult social care, like county councils. The government further committed to a real-terms increase in local government core spending power of approximately 3.2%. Deputy Prime Minister Angela Rayner stated: “For too long councils have been let down by an outdated and inefficient funding system which has led to public services creaking and taxpayers’ money not being spent efficiently.” She continued, “Whilst there’s no magic wand to fix what we’ve inherited, we’re taking the necessary steps to fix the foundations of local government by creating a fairer system and ensuring every penny is spent on the services so many people rely on every day.” The county council’s proposed budget allocates £1.5 million for enhancing highway drainage, in response to this year’s flooding incidents. Additionally, £1.141 million is designated for services supporting children with special educational needs, and £1 million is earmarked for early years assistance. The council announced that £5 million in savings would be achieved through a “forensic review” of expenditures on goods and services. Furthermore, staffing costs are projected to decrease by 2.7% by limiting the engagement of agency workers, not automatically filling vacant positions, prioritizing internal recruitment, and considering potential redundancies. A public consultation regarding the draft budget is scheduled to conclude on 2 January.