Council says government cash boost largely depends on council tax increase
Portsmouth City Council has responded to the government’s fair funding review, saying just £18.2m of the £62.1m headline figure is new funding.
The Labour government this week published its provisional local government finance settlement for the three financial years after 2026/27, with £78bn “made available” to councils across England.
For Portsmouth, the council’s total funding for 2026/27 will be £259.3m, an increase of six per cent. However, the figure includes an assumed 4.99 per cent rise in council tax.
Excluding council tax, the government settlement for the city stands at £144.6m, up £7.9m or 5.8 per cent. The council said the increase is expected to cover inflationary pressures rather than fund service improvements.
Most of the extra funding will be used to meet rising costs and demand, particularly in social care, where costs alone increased by £17.5m in 2025/26.
The council warned the funding will not address rising demand for social care. As a result, planned savings of £3m for the next financial year will still be required.
The council said the settlement includes no additional funding for homelessness or temporary accommodation.
The council also responded to claims by Portsmouth North MP Amanda Martin and Portsmouth South MP Stephen Morgan that the city would receive £62.1m in extra funding over three years to 2028/29.
At the time of the announcement, Ms Martin said: “After campaigning for fairer funding for Portsmouth, I am thrilled with the news of a £62.1m cash injection for our council.
“The funding injection is aimed at restoring pride and opportunity in places that have been left behind, to get back what has been lost. Councils will have more resources available to bring back libraries, youth services, clean streets, and community hubs.
“The money is part of the first multi-year funding settlement in over a decade, giving councils three years of financial certainty so they can plan ahead rather than firefight year to year.”
But according to the council, only £39.9m of that figure represents additional funding, of which £21.7m is based on the government’s assumption that council tax will rise by 4.99 per cent in each of the next three years.
This leaves £18.2m of additional funding over the three-year period to contribute towards social care demand and other inflationary pressures.
Looking ahead, the council said that excluding council tax, government funding is expected to increase by 5.8 per cent next year, followed by rises of 3.7 per cent in 2027/28 and 3.3 per cent in 2028/29.
Council leader Cllr Steve Pitt told the Local Democracy Reporting Service that residents should still expect council tax to rise next year despite the funding settlement.