RESIDENTS of Cornwall face paying the maximum annual council tax rise of 4.99 per cent for at least the next three years. That was the less than welcome news at a meeting of Cornwall Council’s Cabinet on Wednesday, July 30, which also heard there were some financial positives likely to come Cornwall’s way.

The Liberal Democrat and Independent coalition cabinet unanimously signed off the council’s response to the Chancellor’s June spending review and further government changes since then, including the Fairer Funding Review 2.0, which could directly benefit Cornwall. Members were clear to blame the government for the likely maximum council tax increase.

The net result of the government’s spending review is that the budget for local government as a whole will increase by 4.5 per cent, equating to a 2.7 per cent increase in real terms, taking into account inflation. While this increase has been welcomed by Cornwall Council, it is lower than in previous years and assumes that the government will demand Cornwall Council increases council tax by the maximum level.

On the face of it, there are positive signs that the council’s lobbying for fairer funding has been heard. Cornwall’s share of the overall ‘need’ has slightly increased and the formula acknowledges the particular issues rural authorities face in providing services.

The inclusion of ‘remoteness’ in the assessment will be helpful for rural authorities, especially those that are more peripheral, such as Cornwall. Similarly, the inclusion of day visitors and visitor nights numbers within the assessment is also welcomed, given the additional demand on council services, such as beach lifeguarding, resulting from tourists.

Independent deputy leader Cllr Adam Paynter, while pointing out that a 4.99 per cent council tax increase was almost inevitable over the next three years, was cautiously optimistic about positive outcomes for Cornwall. “Because of the increased weight given to factors like remoteness and day visitor numbers on the formula it is evident that the council has the potential to fare better than many other councils.

“The other positive is that this will be the first multi-year settlement in over a decade, covering the three-year period from 2026/27 to 2028/29. This will give us some welcome certainty and allow us to plan more effectively.”

However, he said any potential uplift in the funding Cornwall receives as a result of a new formula will only see the full amount paid in the final year of the three years.

“In light of the changes, the council has started its own spending review,” added Cllr Paynter. “Even with the fairer allocation, the overall funding available for services will remain extremely tight as demand and costs in areas such as housing, adults’ and children’s social care continue to rise.”

Cllr Leigh Frost, the council’s leader, while welcoming the three-year funding strategy, said it was unfortunate and “annoying” that the full funding wouldn’t be seen until the final year. He added: “Government is demanding that we maximise council tax every single year. We can’t continue to do this forever. People were struggling three years ago let alone in four years’ time, and I think it’s outrageous that Government hasn’t taken the initiative to tackle council tax in a meaningful way.”

Cllr Loic Rich added: “We’ve been underfunded for decades. The state of Cornwall reflects that – our public health, our communities, our infrastructure.”

Cllr Frost outlined the disparity between Cornwall and the rest of the country, saying that the average amount spent per person per year on public health in Cornwall is £49, while in the rest of the UK it’s £73.

Cllr Peter La Broy said his underlying worry was the “artificial link between maximising the amount we can charge our council tax payers and that being a requirement of us by central government”. He said it was important that Cornish residents were made aware that the council has no choice but to maximise the amount by 4.99 per cent each year.

Reform UK group leader Cllr Rob Parsonage wanted to know that if the council was to receive additional funding, would it reduce council tax “to help all households in Cornwall with the cost of living crisis”.

Cllr Paynter responded that successive governments have used council tax “as a bit of a weapon” and forced councils’ arms to put up the levy by the full amount. He added that the government penalises those councils that don’t charge the full amount when it comes to further funding. “It makes it extraordinarily difficult for councils.”

He said that a dozen Reform-led councils want to reduce council tax, “so it will be very interesting to see how that works in coming years”. He warned that other councils which have previously done that have come unstuck when it comes to their budgets.

Cllr Paynter added that central government had been “devious in the ways it has manipulated council tax to really force councils into doing exactly what the government wants and forcing them to put council tax up. I would love it if we could have council tax rises of zero per cent. Unfortunately, with the reality of where we are it will be very, very difficult”.

Conservative councillor Connor Donnithorne asked Cllr Paynter if he believed Cornwall Council was a prudentially-run authority. In 2021, the council’s year-end net debt was £570-million, which doubled to £1.02-billion in 2024/25.

The deputy leader, who is also the Cabinet member for resources, said that in his 24 years as a councillor on Cornwall Council and Cornwall County Council before it, the authority had never been on the government’s “naughty step”. “We can argue about politics and net debt but we have the figures of where that can go depending on what this council decides to do. Generally, Cornwall Council and its predecessor have been well-run financially.”

The cabinet unanimously voted in favour of its priorities in responding to the government’s reforms, including a comprehensive council spending review. It will now work towards bringing its first budget to full council for agreement in February next year.