Proposed Council Budget Responds to Rising Demand for Services

THE Council is responding to increasing budget pressures due to the rise in residents needing support by directing additional funds to essential services where demand is highest.

With more residents approaching the Council for help, and the costs of providing those services continuing to rise, additional money has been set aside for the vital services relied on by vulnerable children, adults and families in Reading. The Council’s proposed budget for 2025/26 shows where additional funding has been directed in order to meet those pressures. They include:

• £5.599 million extra for children’s services: due to increased costs of looking after vulnerable children and young people, many of which are presenting with more complex needs; a reducing number of foster carers; and a shortage of residential placements which is enabling private sector providers to push costs up.
• £5.094 million extra for adult social care services: to address a rise in the number of people and complexity of issues they need support with; and the increased costs of providing services through contract inflation.
• £0.884 million extra for homelessness prevention: to tackle the rise in providing temporary accommodation, where the Council has a statutory duty to do so, due to high rents and the rise in evictions from the private rented sector. In Reading, the number of households living in emergency accommodation at the end of December was 182, compared to 71 in April 2022.

The combined cost of caring for vulnerable children, young people and adults now accounts for more than 70% of the Council’s total budget.

Reading Borough Council’s proposed budget for 2025/26 has been balanced through £7.065m of additional efficiency savings and invest-to-save proposals, additional income of £7.277m, and £3.945m from earmarked reserves. Further savings to close the budget gap in 2026/27 and beyond will need to be identified as part of the future budget setting process.

The Council is proposing a Council Tax increase of 4.99% for 2025/26, which includes a 2.00% precept for adult social care. Around 70% of properties in Reading are band C or below, with only 16% of households in band D, making the usual band D comparison less relevant in the town. The proposed council tax increase works out as £1.71 per week for a band C household, excluding police and fire precepts.

“The pressures we see in Reading mirror those in other areas, and particularly those where need amongst the local population is highest.

 “There are several reasons for this, not least the high cost of living in recent years, over a decade of cutbacks to preventative services and a general lack of investment in public services. Taken together, it means more people are now approaching the Council for help, and it also costs us more to deliver those essential services.

 “In Reading, the combined cost of caring for vulnerable children, young people and adults now accounts for more than 70% of our total expenditure, which leaves very little room to prioritise other areas, and indeed to pay for the universal Council services most of us see and use.

 “There was some welcome news for Reading in the Government’s recent finance settlement with additional funding made available through a variety of grants, and we very much look forward to being able to plan for more than one year at a time with the introduction of multi-year settlements which come into effect next year. In the short term however, there remains considerable pressure on our budget.

 “You do not need to look too far from home to see local councils in acute financial distress, with a request for a Council Tax rise of up to 25% refused by Government only last week, and others requesting exceptional financial assistance. Many years of prudent management of the Council’s budget in Reading means we are not in that position, but the one-off use of reserves is a strong indicator that the position is not sustainable in the long term.”

As part of the budget setting process, Reading Council is also proposing to continue with its major programme of investment in improved facilities for residents through its substantial capital programme. Key projects include:

• a continuation of Reading's biggest ever road repair and resurfacing programme
• the construction of a modern new Central Library and improved Civic Centre Reception
• a brand-new studio performance space at the Hexagon
• further investment in new bus, cycle and pedestrian facilities
• more new and refurbished playgrounds
• new sheltered housing facilities for older and vulnerable residents, including on Battle Street at the old Central Pool site
• a continuation of the Council’s investment in new Council homes with a further 282 properties delivered over the next three-year period
• investment in new Council-run children’s homes to avoid expensive private placements  

Reading has cut its carbon emissions by 54% since 2005 and the Council has cut its own carbon footprint by 73% in since 2008. In order to maintain its response to the climate emergency, the proposed budget includes:

• £2.506m in energy saving measures in buildings and renewable energy infrastructure (25/26)
• £250,000 for tree planting (25/26 to 29/30)
• £7.449m to continue increasing its fleet of electric vehicles (25/26 to 29/30)
• £17.747m on zero carbon retrofit works on existing Council housing stock

The Council’s draft capital investment programme totals £332.6 million over the next five-year period, made up of £154.349 million on core services and £178.261 million on the Housing Revenue Account. It is funded from a combination of successful bids for grants, revenue contributions, external borrowing, developer contributions, infrastructure funding and capital receipts, which are received when the Council sells a building it no longer needs, for example. It is different from the money the Council uses to run services and cannot be used to balance the Council’s revenue budget.

The proposed budget will initially go to a meeting of  Policy Committee on Monday 17 February, but will only be finalised at a meeting of Council on Tuesday 25 February. The Council's draft budget report can be found at https://democracy.reading.gov.uk/documents/s34387/2025-26%20Budget%20MTFS%202025-26%20to%202027-28.pdf