Council to ask Peterborough residents about raising council tax above national limit

A report to go before the city council’s cabinet members on October 14 proposes launching a public consultation for the 2026/27 budget to gather input from residents, businesses, and partners.

The consultation would inform budget proposals aimed at balancing the council’s finances amid its ongoing financial challenges, including a current forecast overspend of £5.2 million.

As well as asking for views on where people would feel comfortable with spending reductions in different service areas, the consultation would also ask residents for their views on raising council tax above the national limit.

The current council tax increase limit for Peterborough City Council is 5% which is why many councils, including Peterborough, increased general council tax by 4.99% last year to be under the referendum limit.

The cabinet report states: “Looking to 2026/27, raising council tax above the national limit (with government approval) is one of the ways we are considering meeting our funding challenge in 2026/27, whilst we wait for the Fairer Funding to be fully implemented.

“An additional £1.1m of income could be generated per 1% increase above the 4.99%. This is money we could use to protect services.”

The council wants to know which of the following areas residents would support for additional funding if council tax was increased:

– Investing more in leisure, including a new indoor swimming pool.

– Providing additional support for people who are on low incomes and struggling the most.

– Investing more in keeping the city cleaner and greener.

– Investing more into youth services.

– Protecting libraries and culture services.

In June 2025, the government launched its Fairer Funding consultation, which is a new approach to the way it will allocate funding to councils.

Peterborough City Council estimates the could reduce its budget gap in 2026/27 to £2.3m and put the authority into a healthier financial position in the years that follow.

Regarding the Fairer Funding model, the cabinet report states: “At this stage, the forecast changes to funding are still an estimate and won’t be confirmed until December 2025.

“Therefore, regardless of whether these estimates are accurate or not, we still have a budget gap in 2026/27 of £2.3m and we must plan for the eventuality that it may be as high as £9.3m.”

The city council’s budget consultation is proposed to run from October 14 to November 25, 2025 and will be available via the council’s website.

Feedback will be considered in December and January before the final 2026/27 budget setting in February.