People in the public gallery shouting at Conservative Councillors

Isle of Wight council budget: 5% rise on council tax, cuts to services and higher fees as unplanned cost pressures hit

As set out in council papers published today (Wednesday), the process of setting a budget for the forthcoming year has been one of the most challenging ever experienced by the Isle of Wight council. 

The effect of the war in Ukraine, the continuing impact of Covid and the turbulent national economic environment has created a very difficult situation.

Soaring costs hit councils too
Just as household budgets have been hit by soaring costs, councils across the country have also been affected as demand grows for services, particularly for the most vulnerable children and elderly people.

Since May 2021 the council has sought to understand and respond to the many challenges it faces to deliver a positive future for the Island and its community. 

Aspiration to reverse the annual cycle of cuts
The aspiration for the authority’s spending plans remains to reverse the annual cycle of cuts in the council’s budgets and reinvest in the services the community would like to see. 

However, the council’s financial challenges are significant as set out in the report with costs increasing at a level significantly in excess of funding, requiring the council to find consequent savings of £93 million over the past 12 years.

Unplanned £20m cost pressures
The pace and scale of recent economic events has led the council to experience estimated unplanned cost pressures of around £20m, representing more than 12 per cent of its overall net budget and a ten-fold increase in the level of planned savings for 2023/24, which were originally set at a level of £2m.

Today’s budget papers outline how the authority plans to bridge the funding gap — the difference between what money is available and what needs to be spent — and manage levels of inflation not seen for 40 years, plus rising costs for energy and essential services.

In addition, the authority is forecasting the need for savings of a further £6m by 2026/27.

Increase council tax by 4.99 per cent
As such, of necessity, the council is proposing to increase its council tax by the maximum amount allowed as this is necessary to protect its most vital services.

This would mean increasing council tax by 4.99 per cent, with two per cent of this ringfenced for adult social care — a key pressure for councils across the country.

An extra £86.46 per year
A household living in a Band D property would be likely to see their bill increase by £1.66 per week (£86.46 per year).

Residents are likely to see a reduction in some services, changes in the way others are delivered, and increases to some fees and charges to help offset the rising cost of providing council services.

An organisational redesign of the council is proposed, with the aim of saving £1.2m.

Increased budget for some areas
Despite the savings which need to be made, adult care services will have £7.6m more in their budget, and children’s services will have a further £4.3m. This will help with the extra expense needed to meet the huge increase in demands for services, as well as higher costs due to inflation.

Local council tax support scheme
The proposals also include an uplift in the council’s local council tax support scheme, from 65 per cent to 70 per cent, in addition to extra funding to support the provision of housing affordable for Island residents.

Supporting Islanders
Despite the pressures, the council has also been able to propose continued support for the cross-Solent travel scheme for NHS patients as well as £500,000 for a fuel poverty grant scheme for vulnerable residents, and £400,000 for coastal protection.

Jarman: Surrendering to the situation was unthinkable
Cllr Chris Jarman, Cabinet member for strategic finances, said,

“The scale of the challenges faced in reaching a balanced budget demanded extraordinary efforts from all involved and a recognition that it was better we remained to represent the Island residents and businesses with the difficult decisions required.

“Surrendering to the situation as other authorities have had to do was unthinkable being a betrayal of those we represent.

“We know that the current cost of living crisis is creating intense pressures and we will continue to support residents wherever we can. In particular we have prioritised support to adult social care and children’s services which, coupled with honouring our undertaking to increase council tax support, directs help to those most vulnerable.

“We know residents are facing with the increased cost of living and so proposing a rise in council tax has been a very difficult decision. The alternative would have been to make significant cuts to core council services at a time when many people depend on them for support.”

Read the report
This year’s budget proposals can be found on the Website.

They will be discussed at the council’s Corporate Scrutiny Committee on 7th February, then presented at the Cabinet meeting on 9th February, with the final budget debated and voted on at Full Council on 22nd February.


News shared by Isle of Wight council press office, in their own words. Ed