A budget and three-year financial plan which have been described as ‘the most positive for Peterborough City Council in more than a decade’ have been signed off by Full Council.
Councillor Mohammed Jamil, Cabinet Member for Finance and Corporate Governance, made the statement at last night’s meeting where members came together to discuss the budget for 2026/27 and Medium Term Financial Strategy (MTFS) to 2029.
The 2026/27 budget includes additional investment in areas of most need including children’s social care because of an increase in the number of looked after children and to support the Children’s Services improvement programme, and investment in additional educational psychologists, strengthening support for children with special educational needs and disabilities.
More money will also be going into AI and digital to make services more accessible for the public and more efficient, and there will be investment in communities through the new Crisis and Resilience Fund which launches on 1 April 2026.
Presenting the report to Full Council, Councillor Mohammed Jamil, Cabinet Member for Finance and Corporate Governance, said: “This year has continued to bring its challenges for the council’s finances, evident by the forecast overspend in the current year. However, there is light at the end of the tunnel, and for the first time in many years we have a balanced budget in each of the next three financial years.
“This is the most positive budget Peterborough has had in more than a decade and is largely the result of the Government’s Fairer Funding Review. This review has been long anticipated -with the years of underfunding taking a toll on the councils financial standing and more fundamentally, the services we deliver to our residents.
“Because of the Fairer Funding Review Peterborough will now see one of the largest increases in funding in comparison to other councils and it will allow us to move full steam ahead with our plans to improve our financial resilience. More crucially it will allow us to invest in services, including a new swimming pool and leisure centre and a new Crisis and Resilience Fund supporting people in crisis and focussing on reducing poverty.”
Both the 2026/27 budget and MTFS set out the positive impact that the Government’s Fairer Funding review will have on the council in future years, with balanced budget positions in each of the next three financial years.
However, the council still faces financial challenges in the short-term. This is because it will take three years to see the full benefits of the new funding formulas, and because reserve levels are much lower than ideal and demand for services in some areas continues to grow.
To improve our reserves position, a request was made to the Government for Exceptional Financial Support (EFS), a form of financial flexibility for local authorities facing financial difficulties. This request was approved on Monday and will allow us to borrow money to spend on specific pressures and to protect our reserves. As officers were confident that our request would be approved, EFS was accounted for in the budget and MTFS which went before members last night.
Councillor Shabina Qayyum, Leader of Peterborough City Council, said: “An overhaul of the vastly out of date formulas used to allocate funding to local councils was long over-due and the Government has my utmost respect and gratitude for tackling this major issue which threatened the viability of councils such as ours.
“In Peterborough we will receive one of the largest increases in our core funding across English councils which will allow us to move forward on a more stable footing. This will allow us to invest in key areas such as the replacement swimming pool for the city, children and adult social care, support for those who are struggling financially and the many other priorities which are set out in our updated Corporate Strategy.
“This budget is a real step change for our city and we are closer than we have been in many years to becoming financial sustainable in the long term.”
At the meeting members also approved a number of appendices to the budget, including a Capital Strategy, Financial Risks document, and an updated Corporate Strategy which sets out the council’s priorities. The Corporate Strategy has been updated for 2026/27 to ensure it reflects changes over the past year, including the announcement of Local Government Reorganisation which will be a major focus for the council over the next two years.
A council tax increase of 4.99% (2.99% general Council Tax and 2.0% Adult Social Care precept) was also approved by members. This equates to an increase of £1.68 a week for a Band D property. We continue to charge one of the lowest rates of council tax in the country, around £200 less each year than some of our neighbouring councils. A Council Tax Support Scheme is also available to support those on a low income to pay their Council Tax.
Read the budget report and its various appendices at Agenda for Council on Wednesday 25th February, 2026, 7.00 pm | Peterborough City Council