East Riding of Yorkshire Council formally approved its budget for the 2026/27 financial year last week, a move marked by deep frustration and disappointment among councillors over what they describe as one of the worst government funding settlements in the country.
During the annual budget-setting meeting on Thursday, 5 February 2026, leaders across the political spectrum criticised the outcome of the government’s Fairer Funding Review, asserting that the new system penalises the region for its unique rural and coastal geography.
The approved budget includes a 4.99% increase in council tax to address a permanent reduction in central government funding. This loss is projected to reach nearly £62 million over the next three years, with the council forced to find £41.8 million in savings by 2030 to maintain financial stability.
Councillor Denis Healy, Leader of the Liberal Democrat group, provided a scathing assessment of the impact on local families. He stated:
"The new funding system, grotesquely badged as the fair funding review, is about as unfair to our East Riding residents as it's possible to be.
This council is losing in an instant 67 million in funding over the next 3 years and a further 32 million every year after that.
It is a decision that will affect real people, real families, and real communities right across this authority.
The government's proposals have at a stroke made the East Riding one of the biggest losers among unitary councils in England."
The financial strain comes at a time of rising demand for essential services, particularly in adult social care and children's services. For residents in coastal and market towns such as Bridlington, Hornsea and Driffield the 4.99% tax rise will result in an extra £62.25 a year for a Band A property, rising to £93.37 for those in Band D.
Councillor Healy, argued that the national funding formula fails to account for the high costs of delivering services in a sprawling, sparsely populated region with an older demographic. He said:
"The settlement fails to recognize who we are and what we are. We are rural. We are coastal. We have an ageing population. And those facts bring higher costs, not lower ones.
Delivering adult social care across a wide rural area costs more. Supporting children with additional needs costs more. Yet, under these proposals, none of this is properly recognized. Instead, the East Riding is penalized for being exactly what it is. That cannot be right.
Let me say this plainly. Councils like ours are being asked to carry the consequences of national decisions without being given the tools to succeed."
Councillor Nigel Wilkinson, the Conservative Cabinet member for Finance noted the significant gap between the council’s statutory obligations and the resources provided to meet them:
"The settlement results in around 100 million pounds reduction over the next four years.
Adult social care and children's services are prime examples. We as a local authority are obliged to provide these services by the government, but they have traditionally fallen far short when it comes to funding these services."
Council Leader Anne Handley expressed her own regret regarding the tax increase, stating that the "ever-shrinking budgets from government" left the authority with few alternatives if it is to deliver its priorities for residents. She emphasised that the council is now focused on "prevention, early intervention and transformation" to operate as a "leaner, smarter council" in the face of these challenges.
While the budget achieves a balance through a combination of asset sales, targeted use of reserves, and organisational redesign, the underlying sentiment amongst councillors remains one of being abandoned by national policy. The council's 10-year vision aims to keep the region "safe and thriving," yet the immediate reality for the East Riding is a period of significant financial recalibration.
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