Tewkesbury Borough Council prepares for funding challenges ahead of Local Government Reorganisation with new financial strategy
Posted on: 14 May 2026
Tewkesbury Borough Council has approved its latest Medium Term Financial Strategy (MTFS), which outlines the financial pressures the authority expects to face over the coming years, and the steps required to maintain stability during a period of major change.
The strategy, approved by Council on Wednesday, 13 May 2026, highlights how more than a decade of uncertainty in government funding – combined with changes to grants, the New Homes Bonus, and the national reset of business rates – continues to place significant strain on local government finances.
Although the Council is expected to be abolished by April 2028, as part of potential Local Government Reorganisation, the MTFS will play a crucial role in ensuring that any successor unitary authority inherits a clear, responsible and realistic financial position.
Councillor Stewart Dove, Lead Member for Finance and Asset Management, said: “This council remains financially stable and is not at risk of a Section 114 notice, but we do face a significant budget gap across the next 3 years that will require firm action. The government’s settlement and Fair Funding Review gave clarity but sadly resulted in further, substantial reductions to the amount of funding the council will receive in the future.
“With the potential for the council to be likely abolished in 2028 due to government plans for reorganisation, planning ahead is essential to ensure the new unitary authority begins life on a secure and sustainable footing.”
The MTFS shows that the council will need to save £1.09 million in 2026/27 and £0.5 million in 2027/28. These targets are challenging given the pressures already facing the organisation and the savings made in previous years.
The Fair Funding Review has had a particularly significant impact on Tewkesbury Borough. The government’s new method for assessing how much funding each council needs has assumed that additional funding will come from council tax, and as a result grant funding has been cut.
To soften the impact, the government will phase in the reduction of funding over three years and provide temporary ‘damping’ grants for two years. It will also protect 95% of the business rates income the council currently retains.
The council has already planned prudent measures, including savings from shared services, reduced member allowance costs due to 26/27 freeze, strengthened staffing budgets, potential service savings and the use of healthy reserves.
