3.5 per cent: Nottingham City council tax rise set to be lowest in almost two decades

This raises council tax for a Band D property to £2,342.08, an increase of £79.20 from 2025-26.

The tax rise will be lower than the 3.99 per cent proposed by Reform-led Nottinghamshire County Council earlier this month.

The Labour-led authority has been increasing council tax by the maximum allowed amount of 4.99 per cent since 2008.

It comes after the authority received an extra £10m in funding from the Labour Government, as part of its fairer funding review, whereby more resources have been directed to areas with profound deprivation.

Government commissioners, who were sent in to oversee critical improvements just months after the council declared itself effectively bankrupt in November 2023, will also be departing at the end of the month.

They said the council has had an “almost unimaginable” turnaround in its financial situation under its new leader, Cllr Neghat Khan.

Coun Ethan Radford, council deputy leader, who represents Bulwell, told the Local Democracy Reporting Service, the authority’s finances ‘are now an enabler, not a blocker'.

He said: “As a bare minimum as an authority we have to set a council tax rate that at least covers the cost of inflation, just like with household budgets the costs for running the authority increase, wages increase, energy prices increase and we have to set a rate that continues us to provide services.

“Even before the funding settlement the work we’ve done to get the council’s house in order meant that we can invest £15m in the budget, and not have to make horrific savings to plug budget gaps.

“When you compare us to the county, who are in a much more precarious financial position now, ironically, we aren’t using a penny of reserves to balance the budget, we aren’t using a penny of Exceptional Financial Support.

"We are balancing the budget off our own back.”

The council is currently anticipating a £1m underspend, meaning it has more money coming in than what it is spending.

General fund debt – the pot of cash for day-to-day services – has also been reduced from £827m in 2020 to £292m as of the start of 2026.

However, budget documents published ahead of a meeting of senior councillors on February 24 reveal the council is expecting a cumulative budget gap of £37.1m over the next four-year period, without savings being identified in the years 2027-28 through 2029-30.

Cllr Kirsty L Jones (NPA), leader of the Nottingham People’s Alliance opposition group, questioned the reinvestment in things such as bringing back the Arrow magazine, which will be costing £120,000, as well as a £250,000 economic development team which will help the council bid for cash.

She said : “This shows how decision-making is centralised and embeds austerity as money goes to competitive bidding rather than services.

“An increase of 3.5 per cent is still an increase which will impact Nottingham residents who are paying more for fewer and lower quality services and continued cuts to services – particularly adult social services – in the 2026-2027 budget.

“Reversing cuts would have been a better use of resources than some of the choices, for example the Arrow magazine and support for businesses.

“The leadership’s political choice is to continue to maintain cuts or outsourcing of key services, such as libraries and community centres, as well as the services which serve the most vulnerable people in Nottingham – such as the continuing cuts to children’s services and adult social services.

“The investment does not cover what Nottingham has lost.

"I doubt that Nottingham residents will feel much has changed both in terms of their household circumstances or the services they would expect from the council.”

Coun Andrew Rule (Ind), of the Nottingham Independents and Independent opposition group, added: “Residents will not forget that the recent years of maximum increases are in part the consequence of the controlling group’s Robin Hood Energy failure and repaying funds deemed to have been unlawfully spent from the housing revenue account.”

City council tax breakdown for 2026/27:

Band A: £1,561.39 (with police and fire: £1,836.93)

Band B: £1,821.62 (with police and fire: £2,143.08)

Band C: £2,081.85 (with police and fire: £2,449.24)

Band D: £2,342.08 (with police and fire: £2,755.39)

Band E: £2,862.54 (with police and fire: £3,367.70)

Band F: £3,383.01 (with police and fire: £3,980.01)

Band G: £3,903.47 (with police and fire: £4,592.32)

Band H: £4,684.16 (with police and fire: £5,510.78)