Government confirms no referendum principles for parish and town councils when setting precepts.
The government has confirmed that for the upcoming financial year, 2026/27, and up to 2028/29, referendum principles will not apply to parish and town councils or strategic mayoral authorities. This decision, outlined in the provisional Local Government Finance Settlement, means that these councils can set their precept levels without triggering a local referendum, regardless of the percentage increase applied. You can read the Local Government Finance Settlement online at GOV.UK by USING THIS LINK.
What Does This Mean in Practice?
For parish and town councils, this maintains greater flexibility in budgeting and planning local services. Unlike principal authorities, which face caps on council tax increases and must hold a referendum if they exceed those limits, local councils can adjust their precept to meet community needs without the administrative burden or cost of a public vote. However, the government continues to expect restraint and will monitor decisions taken by local councils when considering future policy. This freedom is intended to help councils respond to rising costs and deliver essential services without unnecessary financial constraints.
Here are some key implications for parish and town councils with news that the current arrangements remain in place:
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Greater Flexibility in Setting Precepts
Local councils can increase their precept without triggering a costly and time-consuming local referendum, allowing them to respond to rising costs and community priorities. -
Opportunity to Invest in Local Services
This freedom enables councils to plan and fund improvements or maintain essential services without the uncertainty of referendum constraints. -
Responsibility for Transparency and Justification
While there is no cap, local councils are expected to act responsibly and clearly explain any increases to residents to maintain trust and accountability. -
Support for Long-Term Planning
Councils can take a more strategic approach to budgeting, including preparing for future financial pressures and regional changes. -
Government Monitoring Continues
Although no formal limits apply, decisions will be observed by government when shaping future policy, so prudent financial management remains essential.
