Council leader Phil Jordan has claimed the Isle of Wight is at the end of the financial road and cannot set a balanced budget without Government support.
The Minister of State for Local Government and Homelessness, Alison McGovern, has written to council leaders outlining the 2026–27 to 2028–29 multi-year Local Government Finance Settlement and the introduction of a new Local Outcomes Framework.
According to the letter, the Government is consolidating funding streams, updating outdated data and aligning funding more closely with need and deprivation.
An additional £740million in new grant funding nationally will be added for 2026–27, bringing total new settlement funding for 2026–29 to more than £4billion.
Councils with historic Dedicated Schools Grant (DSG) High Needs deficits will receive grants covering 90% of deficits accrued up to 2025–26. Further support for post-2026 deficits will be proportionate, but not unlimited.
7 councils will be permitted to raise council tax above referendum limits, although not beyond average bill levels. The Isle of Wight Council is already above the national average for council tax.
Technical changes will also adjust business rates pooling income, while a one-off Adjustment Support Grant will protect councils whose Core Spending Power would otherwise fall in 2026–27.
Wider reforms are planned, including profit caps for children’s social care placements, a financially sustainable SEND system and the creation of an independent adult social care commission.
Responding to the announcement, Councillor Phil Jordan, Leader of the Isle of Wight Council, said he had written to the Minister to warn the authority is in a worsening financial position.
Cllr Jordan said:
“I have written today to the Minister explaining that the Isle of Wight Council is materially worse off because of the Fair Funding Review and three-year settlement. Our financial predicament means setting a budget is unachievable without Government support and we have therefore applied for Exceptional Financial Support (EFS) last week.
“As part of the EFS, Government expects us to raise Council Tax by the maximum 5%, sell off any remaining assets, liquidate just about all reserves and create a transformation plan through an Improvement Board. In addition, they expect us to raise service charges across the council.
“When that is done, using EFS, they will allow the council to borrow money to fund any financial gaps. That is absolute madness. Borrowing to pay for budget shortfalls and debt is utterly unsustainable and simply won’t work.
“Contrary to what some believe, the Council has managed its finances very prudently. We have significantly reduced any new borrowings to almost zero and substantially reduced the loan burden over the past five years. We have re-organised and re-structured. We have only spent where it was necessary or could not be avoided.
“We are an Island and as an Island we pay more to deliver the same services as our comparative neighbouring councils – around £24million more a year. We have evidenced this to Government for many years.
“Instead of recognising this and funding us correctly, the opposite has happened. Government have cut our funding since 2010 to the extent that we now have roughly £100million a year less than we had in 2010.
“Like all budgets, it cannot continue forever having less income and more expenditure because of costs, inflation and demand for services. We are at the end of the financial road and, with nowhere to turn, need Government to intervene and act without further delay.”
Labour and financial jeopardy, Rachel Reeves forte.
Dont worry jordan,you will be booted out come may,you want more revenue due to shortfalls,then you and your cronies give yourselves a pay rise,which means one thing,you have no morals,you should have allrejected the allowance rise,but you didnt,you lot are just thinking of yourselves as usual,one things for sure,you will be waiting for my council tax this year!
Maybe it’s time to reduce the number of council staff.
reduce salaries and pensions.
It’s been an open cheque book for years that is finally
coming to an end.
The island cannot afford to keep paying for this nonsense.
The Council could make so much extra revenue from other
means.
Take a leaf out of Sadiq Khan’s book, he knows how to
create extra revenue.
Council tax could be reduced if the very costly town councils were abolished.
Lots of duplication and mini empire building.
Scrap useless needless town councils.
The difference, of course, is that Town and Parish Councillors are not paid and don’t have an army of staff working for them, usually just a single Clerk.
The existing members of pension schemes have rights to the pension they worked for. You can’t ask people to work for 40 years with a pension as part of their remuneration package then just tell them they won’t get it. So it will take a long time for pension changes to make a tangible difference. Would you accept not receiving your pension?
The Government keep increasing the state pensions age
and look what they done to the Waspi’s.
Anything is possible thesedays.
But they found no problem giving themselves a pay rise. Amazing
They are rotten to the core.
make some cuts then FFS
Everyone should refuse to pay any further council tax rises, until those rises can be fairly justified, the wage rises of the councilors can be justified by proving their competence, and we, the payers, are satisfied with the quality of the council services they provide
Some areas in the country that are withholding local
elections are refusing to pay their council tax
What’s the betting they will put the people inside
for not paying.
Starmer said not a penny more on your council tax under a Liebor government so what is this? Can we ask Quigley for a comment please?
K.S like most politicians all say one thing and do the
opposite.
They all work for the same boss, people forget that they
are only paid to do what their boss tells them to do!
They themselves have no control.
This man is dangerous to the isle of Wight he has no interest in the people or the island just his own back pocket.
He needs to go or be voted out before it crumbles entirely
He forgets where he came from…. an office boy mending computers…or trying to
What people need to understand is that 85% of local authority budgets are spent on Children’s Services or services for vulnerable adults. The Council has a statutory resposibility to provide those services. They cannot decline to provide them. So there is only 15% left to pay for everything else and any cuts must come from that 15%. Under those circumstances, it is a tough job but it remains difficult to understand how County Councillors could justify their own increase in remuneration.
Does this mean we should be pushing to review the Care Act?
Every year identical issue.