The Isle of Wight Council has today (Tuesday) outlined its draft 2026/27 budget for consideration by the Policy, Finance and Resources Committee.
It comes as the authority faces unprecedented financial pressures driven by rising demand, increasing contract costs, and a national funding settlement that leaves the Island at a significant disadvantage compared with similar councils.
A range of savings measures
The proposals include a range of savings measures, increases to some fees and charges, changes to service delivery, reductions in capital spending, and a proposed cross‑council staffing reduction programme.
These steps are necessary to help bridge a substantial budget gap that cannot be resolved through local efficiencies alone.
The financial pressures affecting the council have intensified rapidly in recent months, including:
- a sharp rise in demand and complexity in adult and children’s social care;
- a major increase in the cost of the waste contract;
- a final Local Government Finance Settlement that leaves the Isle of Wight materially worse off, despite its unique higher‑cost environment.
Unavoidable additional costs
The Island faces unavoidable additional costs for delivering services due to its geography, including transport, specialist placements, waste, contractor availability and the need to provide all statutory services locally. These pressures do not exist in the same way for mainland councils.
At the same time, since 2010 the council has made total savings of around £100 million to accommodate periods of funding reductions as well as periods where the unavoidable costs of delivering services on the Island has risen at a faster rate than funding. A further £6.2 million of savings has been identified in the proposed budget.
‘Prudent’ management of finances
The council has managed its finances prudently for many years, reducing borrowing, restructuring services and taking difficult decisions to stay within budget. But the scale of the structural deficit now facing the authority cannot be resolved through local decisions alone.
The council faces a structural budget deficit of £20 million in the 2026/27 financial year, with net funding forecasted to stay flat in the coming years.
Exceptional Financial Support
To avoid the need for emergency measures, such as a Section 114 notice, the council has applied for Exceptional Financial Support (EFS) — a government mechanism that councils can use in severe financial difficulty to set a legal budget in the short term.
EFS would allow the council to access a loan facility to close the remaining gap. However, it is not a long-term solution and adds to the Council’s costs as the loan plus interest has to be repaid. It will also require the delivery of further savings to bridge the gap and the development of a transformation and improvement plan overseen by an independent board.
Proposed changes across services
No final decisions have been made on the following proposals, and they are subject to review from the council’s Policy, Finance and Resources Committee and Full Council later this month. The budget proposals include:
- A 4.99 per cent council tax rise, the maximum allowed without a referendum, which the council is obliged to apply as part of the EFS process.
- Efficiencies and service changes in adult and children’s social care.
- Increases to selected fees and charges, including parking and the floating bridge.
- The introduction of new car parking charges in certain areas of the Island.
- Adjustments to elements of waste and public realm services.
- Changes to some non‑statutory services.
- The closure of Newport Roman Villa to the public, but with continued maintenance of the asset.
- A reduction and re‑prioritisation of capital investment.
- A proposed staffing reduction programme across the council, following full management‑of‑change processes, including consideration of redeployment and voluntary redundancy.
Capital programme investments continue to support key services
Alongside the difficult decisions being proposed, the council is also continuing to invest to deliver core statutory duties such as essential infrastructure that protects vulnerable residents, supports local communities and maintains the Island’s core assets.
The 2026–27 capital programme includes:
- Major investment in children’s services, including improvements to Beaulieu House, the creation of a new emergency accommodation unit, and significant capital projects supporting children with additional needs.
- Funding for new coastal defences, ensuring key seafront areas remain safe, resilient and accessible.
- Playground renewals and public realm improvements to maintain safe, welcoming community spaces.
- Investment in highways safety, drainage schemes to prevent flooding, geotechnical works and equality‑related improvements across the road network.
- Upgrades to essential public facilities, including crematorium improvements and ongoing school maintenance.
- Continued expansion of Wightcare assisted technology, helping more vulnerable residents live independently and safely at home.
These investments are largely supported through ring‑fenced grants or committed programmes and therefore cannot be used to support day‑to‑day services.
Council votes
The budget proposals will be considered by the council’s Policy, Finance and Resources Committee on Friday, 20th February and Full Council on Wednesday, 25th February.
News shared by Isle of Wight council press office, in their own words. Ed
