Reading’s Liberal Democrat councillors have opposed the council’s 2026/27 budget, citing concerns over depleted reserves, last-minute financial planning, and long-term sustainability.
At a Full Council meeting on Monday evening, the three Lib Dem councillors criticised the Labour administration for balancing the budget only two weeks earlier by drawing £3.6 million from the Financial Resilience Reserve, leaving the reserve set to fall to just £269,000 by 2027/28.
Reserves under pressure
Councillor Anne Thompson highlighted the scale of the council’s financial pressures:
“To balance the budget, we will draw down £7.302 million from reserves — almost double the drawdown a year ago. Our reserves are shrinking. The General Fund Revenue Reserve has fallen from £49.8 million to a forecast of £30.2 million in just one year. You don’t have to be a mathematical genius to know this can’t go on much longer.”
She also criticised the government’s funding settlement, noting that Reading receives nothing from the £865 million Recovery Grant despite above-average levels of income, education, crime, and housing deprivation.
“Had the Recovery Grant been distributed fairly, Reading would have received an additional £2.05 million. That is a deliberate political choice by the Labour government, and it is not fair,” she said.
Cllr Thompson highlighted growing social pressures, including a 311-person increase in the Adult Social Care caseload over nine months and rising numbers of looked-after children, despite national trends showing a decline.
Last-minute budget concerns
Councillor James Moore focused on the council’s handling of the budget.
“This budget was not balanced in December. It had a £4.4 million gap ten weeks ago. It was only closed two weeks before this meeting by drawing an additional £3.6 million from reserves at the last minute. That is not long-term planning — that is firefighting.”
Cllr Moore also raised concerns over repeated overspending and underdelivery of savings. Last year, the council overspent by £9.3 million, with a forecast £4 million overspend this year. The savings programme delivered 73% of planned savings last year, with projections of only 66% delivery this year, according to KPMG analysis.
He also questioned spending priorities, pointing to a denied request for a hearing loop system at Tilehurst Community Centre while highlighting a £920 flight funded for the mayor to attend a football match in Germany.
Council Tax rise
The budget approved by the Labour-controlled council includes a 4.99% Council Tax increase, the maximum allowed without a referendum, for the third consecutive year. For a typical Band C household, this represents an additional £94 per year.
Cllr Thompson noted that public support for the rises is waning:
“The budget engagement showed 50.5% of respondents now oppose the Council Tax increase — a significant shift from last year when 60% supported it.”
Future years remain unbalanced
Despite the reserve draw, the Medium Term Financial Strategy indicates further budget gaps of £1.996 million in 2027/28 and £207,000 in 2028/29 still need to be addressed.
All three Liberal Democrat councillors voted against the budget, citing concerns over governance, financial fragility, and the long-term sustainability of the council’s finances.
