Council approves a balanced budget set against increased national pressures

Dorset Council’s budget of £417.2 million for 2025-26 has been approved by councillors at the Full Council meeting on 11 February, with substantial investment earmarked for essential frontline council services which local residents and businesses rely on.

Councils are required by law to set a balanced budget with expenditure equal to revenue. Dorset Council faces rising pressures on services, for example with the growing number of older people in Dorset who need social care support. The additional cost of service delivery next financial year is forecast to be £83.4 million.

 Due to the national funding formula set by Government for councils, Dorset is heavily dependent on council tax for funding of the essential services it provides. Council tax will increase next year by just under 5 per cent (3 per cent plus 2 per cent for the adult social care precept). The increase is equivalent to £1.91 extra per week for a Band D property.

As a means of managing costs into the future, the council has developed a transformation plan to streamline council operations including increased use of technology, better customer service, closer working with communities, and lower operating costs. Over the coming years, these changes will result in a slimmer council with fewer staff.

Cllr Simon Clifford, Dorset Council’s Cabinet Member for Finance and Capital Strategy, said:

“We have developed this balanced budget in a national context of significant financial challenge. We want to continue to protect essential frontline council services, but still have difficult decisions to make over the coming years.

“It’s a tough financial climate with inflation, higher National Insurance costs, and the ever-increasing need for social care services, particularly with our growing older population in Dorset.

“The funding arrangements set out by government in the Local Government Funding Settlement means Dorset Council relies heavily on the revenue generated by council tax and retained business rates to raise the vital funds needed to deliver services to the residents of Dorset. 

“We are lobbying Government for fairer funding for Dorset so that we can reduce the burden on local taxpayers in future. We will not be looking to increase council tax levels above government-set limits for the five-year duration of this administration.”

Dorset Council continues to provide a range of support for those residents hardest hit by the cost of living including additional support for low-income households. This includes our revised council tax reduction scheme which came into effect on 1 April 2024, allowing eligible working-age households to claim up to 100 per cent of their council tax bill.

You can find out more about where the council’s money comes from, and how we spend it, on our website dorsetcouncil.gov.uk/our-budget-explained.