Sutton Council faces a £13.6m gap in 2027/28 and £36.5m by 2029/30, before any council tax rise. A 4.99% rise would raise about £7.5m a year.
Sutton Council has to find £13.6m in 2027/28 to balance its budget. By 2029/30 the total gap reaches £36.5m. That figure assumes no council tax rise at all.
The numbers are in the council’s new Medium Term Financial Strategy, published for the Strategy and Resources Committee on Monday 5 October (committee report, agenda item 6). The strategy itself says the gap is “approximately 15% of Forecast Budget Requirement” (Medium Term Financial Strategy 2026 to 2030, Appendix C).
Detailed savings proposals are due in the budget report in February 2027.
The gap, year by year
The forecast table in the report shows this year, 2026/27, balanced. After that:
| Year | Gap that year | Running total |
|---|---|---|
| 2027/28 | £13.64m | £13.64m |
| 2028/29 | £15.79m | £29.42m |
| 2029/30 | £7.13m | £36.55m |
The report rounds the final total to £36.5m. The table assumes all savings already agreed are delivered in full. Any shortfall makes the gap bigger.
Why the gap is opening
The strategy gives three main reasons.
- Rising demand. The biggest driver is £4.5m to £5.5m a year of extra spending for the next three years. It covers more people needing care, education and housing support, and needs that are more complex.
- Inflation. Pay rises and price increases in contracts the council cannot avoid add more than £7m a year.
- Less money from government. The government’s Fair Funding reforms changed how councils’ funding is shared out. The strategy says Sutton “was one of the ‘losers’”. Government grant falls by £2.4m in 2027/28 and a further £3.2m in 2028/29.
The government’s three-year settlement in December 2025 confirmed an 8.1% increase in Sutton’s core spending power. The strategy says that figure assumed the council raises council tax by the maximum every year. Take council tax out, and Sutton’s core spending power falls by 9.3%.
Council tax: the lever not yet pulled
The forecast assumes no council tax rise in any year. Sutton can currently raise it by up to 4.99% a year, including 2% for adult social care. The strategy says a 4.99% rise would bring in about £7.5m a year.
Council tax is already the main source of money. It makes up over 60% of the council’s funding, and about 70% once business rates are added.
The strategy says any extra spending in future years “will have to be funded by reductions in cost or transformation savings delivered by the Council, and by the local taxpayer through increases in Council Tax.” Any decision on the rise is made at the budget meeting in February or March.
What the council plans to do
Its answer is a transformation programme called “One Sutton”, being developed this year. Most of its savings are expected towards the end of the four years, so smaller efficiency savings are also needed to balance the 2027/28 budget.
The strategy is blunt about the scale:
“We cannot afford to continue operating the way we do currently and still deliver statutory services.”
It also warns: “This may mean we stop doing some things, or deliver outcomes in different ways going forwards.” No specific services are named in these papers.
Reserves and special needs deficit
Sutton has historically held “a very low level” of reserves, the strategy says. Its general fund reserve was £11.1m at the end of March 2026, equal to 5% of this year’s £222.6m net budget. Total usable reserves, most of them set aside for specific purposes, were £120.8m.
The biggest risk sits in special educational needs funding, which comes from a separate schools grant. The accumulated deficit was £21.6m at the end of 2025/26. A separate first-quarter finance report forecasts it reaching £35.28m by March 2027 (Finance and Performance, Quarter 1 2026/27).
The government has said it will write off up to 90% of these deficits. The strategy says the council will still need to fund at least £3.6m, and possibly up to £5m by 2028/29. It is already setting money aside for that.
Also in the finance papers
- This year is on track. The quarter 1 report forecasts the day-to-day budget ending 2026/27 £0.60m under budget. Children’s social care is £1.60m under, adult social care £1.19m over. Council housing is forecast £1.06m over.
- A cinema tenant’s debt is written off. Councillors are asked to write off £159,900 owed by The Really Local Group, a cinema operator. It signed a council lease in September 2024, stopped paying rent after a rent-free period ended in January 2025, and is now in liquidation. The council has taken the property back.
- Fewer young staff. The council’s new workforce strategy says the share of its staff aged 16 to 24 has halved from 6% to 3%. It blames lower recruitment because of budget pressures and “automated note taking” replacing entry-level admin roles.
What it means for you
- Nothing changes on your bill yet. Council tax for 2027/28 is set in February or March 2027. The forecast in these papers assumes no rise, but it also says rises are part of how the gap gets closed.
- Watch for the budget proposals. Savings plans for 2027/28 are due in the February 2027 budget report. That is when any service cuts or charges would be named.
- Check your band. Our guide to Sutton council tax bands lists this year’s charges and how to challenge your band.
The committee meets at 7pm on Monday 5 October at the Civic Offices, St Nicholas Way. It will be asked to recommend the strategy and a new corporate plan to full council (meeting papers).
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