Cheshire East is looking at raising council tax by no more than 4.99 per cent and hopes it won't need to take up an option to increase it by more, the council leader has said.

The government has indicated that local authorities, in exceptional circumstances, may be allowed to increase their council tax by more than the 4.99 per cent capped limit.

A report to next week's meeting of Cheshire East's finance sub-committee states: "Where a council is in need of exceptional financial support and views additional council tax increases as critical to maintaining their financial sustainability, the government will continue to consider requests for bespoke referendum principles."

But council leader Nick Mannion told the Local Democracy Reporting Service (LDRS) today: "It's an option available but we're hopeful we'll not have to use it and we're working towards remaining within the 4.99 per cent maximum increase."

Councillor Nick Mannion says he is hopeful that they won't have to increase council tax more than 4.99 per cent (Cheshire East Council).

Cllr Mannion also stressed two per cent of the council tax increase is the adult social care precept and can only be spent on this alone, and said social care costs had spiralled well above the inflation rate.

The report to the committee, from interim executive director of resources Adele Taylor, highlights the amount of council tax foregone because CEC accepted the council tax freeze grant between 2011/12 and 2015/16 when it was Conservative controlled.

It states: "If we had increased council tax income to the maximum referendum limit every year then, by the time we get to the 2024/25 year, we would have had £35m more in council tax income for this year."

CEC council tax is also lower than neighbouring Cheshire West and Chester (CWAC) where the current band D rate is £1,884.07, compared to £1,792.59 in Cheshire East.

The report states: "Council tax income in 2024/25 if using CWAC band D rate and CEC taxbase would equate to an extra £14.7m in 2024/25."

CEC applied to the government in February 2024 for exceptional financial support (EFS) of up to £17.6m for this financial year, although it has not yet drawn down on that.

Last month it applied for up to £31.4m for 2025/26 – although, because the funding gap is now forecast to be £25.3m, the EFS required has been revised down by £6.1m.

Councillor Janet Clowes, Conservative group leader on Cheshire East Council (CEC).

Conservative group leader Janet Clowes told the LDRS with the council facing a shortfall of £25.3m over 2025/26 and a further projected shortfall of £21.3m in 2026/27 'it is therefore not surprising to see that one recommendation next Thursday, is that CEC finally draws down the £17.3m EFS requested from government'.

She warned this is not 'free' money but a loan that will incur significant interest payments over lengthy repayment periods.

"The committee is therefore asked to consider an alternative set of scenarios where council tax is raised to levels that exceed the current limit of 4.99 per cent," said Cllr Clowes.

"The simplistic explanation offered is that CE council tax levels are lower than other similar authorities and so raising them to match is justified."

With reference to the five-year council tax freeze grant under the Tories, she said Eric Pickles had honoured the election pledge at the time 'to help control rampant council tax hikes under the previous Labour government'.

She added: "Next Thursday, councillors will be asked to consider which is preferable – the burden of long-term EFS borrowing or the up-front pressures of hiking council tax levels above the current 4.99 per cent limit this year and maybe next year as well."

The committee on Thursday will be considering and noting the issues and making recommendations to the corporate policy committee and full council.

A final decision on the 2025/26 budget and the council tax won't be made until the full council meeting in February.

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