Budget challenge

In March, Colchester residents will receive information about how their council tax has contributed to the running of the council and its services for 2025/2026. This will either come to you as a leaflet in your printed council tax bill envelope or as a link on your e-bill. 

Budget balanced and shortfall filled 

Colchester, like councils across the country, is facing a tough financial landscape.  

Costs are higher than they’ve ever been, from energy and materials to the growing demand for housing support, while the long‑term effects of the cost‑of‑living crisis continue to be felt.  

We’re not alone, and we’re not without a plan. 

The city council budget is balanced for 2026/27, thanks to more income from paid council services, strategic use of some of our Reserves and transforming how the council runs through our Fit for the Future programme. 

Over the past few years, councils everywhere have dealt with rising inflation, increased homelessness pressures, and reduced buying power of Government funding in real terms. These national challenges have a direct impact on what it costs to run services locally. 

Colchester is in a stronger position than some authorities, but the money coming in doesn’t currently match the money needed to deliver services the way residents expect. Continuing as we are simply isn’t sustainable. 

That’s why we’re being upfront about the challenge, and about the big changes we need to make to stay on a stable financial footing. Transforming how we work now means we can protect essential services and avoid ever reaching the point where emergency measures, like issuing a Section 114 notice, come into play.  

How we are closing the budget shortfall 

Closing our budget shortfall isn’t just about cuts, it’s about smart choices, modernisation, and putting resources where they make the biggest difference. 

Over the past year, hard work across the council has already helped reduce our projected gap significantly. We’ve tightened running costs, reduced energy use, reshaped parts of the organisation, and improved how run our services. These steps are already paying off.  

But to finish the job and stay financially secure in the years ahead, we’re extending that approach: 

• Transforming how the council works 
  We’re continuing our Fit for the Future transformation programme to make the council leaner, more efficient and more modern, ensuring we’re delivering high‑quality services at sustainable cost levels. 

• Generating more income 
  We’re investing in areas that help bring money back into the council, like improving leisure services, making the best use of our buildings, and supporting projects that create long‑term revenue. Increases across most of the council’s fees and charges have been kept broadly in line with inflation or have been set to start to cover some of our direct costs of service delivery.  This ensures we charge a fair and equitable price. Borrowing will play a part in this, and we’ve taken prudent measures to keep it safe and affordable.  

• Using technology and innovation 
  Better digital tools mean quicker processes; less paperwork and more staff time focused on frontline services. 

• Being realistic and ambitious 
  We know we still face pressures, especially around temporary accommodation and homelessness. But with strong planning and the right investment, we can continue to protect vital services and build a council that’s financially resilient for the long term.  

Funding for resident priorities 

Thanks to your support, through the budget consultation feedback and Residents’ Panel meetings, the council has reviewed services under the greatest pressure, and the budget will increase some spending in areas that matter to residents. 

Specific funding has been allocated to refurbish around 40 play parks across the city. Twelve of these will receive a full refurbishment, while the others will benefit from partial upgrades. As part of this programme, we have carried out dedicated consultations with local residents, on the 12 fully refurbished play areas, to ensure their voices directly inform the design, accessibility, and future use of these important community spaces.

This work forms part of our broader commitment to improving community assets across the city, ensuring that neighbourhoods have high‑quality, well-maintained facilities that support health, wellbeing, and community pride.

In addition, we are investing in our Leisure Services, increasing our work to prevent homelessness, and continuing to invest in creating homes for those who need them most.

This isn’t just about balancing the books. It’s about protecting the services people rely on every day and making Colchester a better place to live, work and visit.