Budget 2026/27

Each year councils are required by law to set a balanced budget for the upcoming 12 months.

Following on from the valuable series of engagement events we held with local residents in 2025 where you talked to us about your priorities, Luton Council has now developed proposals for its annual budget for 2026/27.

Luton Council welcomes the recent announcement from government which will increase the level of financial support the council receives from central government over the next three years.

This is however set against a backdrop of significant and long-term reductions in funding. Since 2010, the council has had to remove £186 million from its budget, fundamentally reshaping services and how they are delivered.

While the review represents a first step in the right direction, it only begins to address the impact that historic funding reductions have had on council services and the town.

Demand for services continues to rise sharply, particularly in children’s services, adult social care and housing, where pressures are being driven by increasing need and complexity among our most vulnerable residents.

We have reviewed the details of the settlement and carefully assessed how best to use the additional funding, to starts to redress years of inequality, to reduce the underlying issues of deprivation and cost-of-living challenges Luton continues to face.

The proposed budget responds to those challenges in a balanced way by:

• protecting frontline services
• investing where it will make a difference
• putting the council on a more sustainable footing for the years ahead

Collectively, these changes will provide much-needed investment in supporting those most in need while also meeting our legal obligation to present a balanced budget.

It will also help us to focus and invest in more of the areas that residents told us were most important to them, like safety, cleanliness and improving Luton Town Centre.

Additional investment to protect vital services and support the most vulnerable

This proposed budget sets out how the council will spend its money in a careful and responsible way.

It makes sure essential day-to-day services are protected, while also investing in the long-term ambitions of the town’s Luton 2040 vision.

£23.2 million is being proposed to protect frontline services so there will be no cuts to services residents currently receive.

This includes extra funding for children’s services and adult social care, where demand is extremely high.

The money will help support people now, improve early help for families, and make sure these services are strong enough for the years ahead.

An additional £7.7 million is set aside to cover rising costs such as inflation. This helps services continue to run well and supports local jobs, including those provided by organisations the council works with.

The budget also invests in the council’s workforce and skills so staff have the right tools and expertise to deliver services more effectively. This includes:

• improving areas like digital systems
• managing projects
• looking after council buildings
• commissioning services

It also supports economic growth, including council Inclusive Growth projects such as:

• new food waste collections
• building more homes
• supporting regeneration across the town

These plans are expected to create 71 jobs directly and another 140 jobs indirectly, helping strengthen the local economy.

Increasing council tax to invest in vital services

To keep providing the services people in Luton depend on, the council is proposing a Council Tax increase of 2.99% and a ring-fenced Social Care precept of 2%. We know this is not welcome news, but it is a necessary step.

Councils across the country are facing the same challenges, and central government expects councils to raise Council Tax to help protect essential services.

While this is a difficult decision, this increase is necessary to keep services running, protect the most vulnerable people, and make sure Luton can continue to support its residents in the years ahead.

Supporting our residents with these changes

We fully appreciate that the proposed increase in council tax comes at a time where many Luton residents are already experiencing financial difficulties because of the rising cost of living.

To support residents through this challenging period, the council will continue to offer our Council Tax support scheme and hardship fund for those most in need.

Many Luton residents are also entitled to additional support from the council to help with the impacts of rising costs.

You can find out whether you are entitled to extra support by visiting our Supporting You page, which also includes advice, resources and guidance for anyone struggling financially.

Making savings to address the growing budget deficit

While the additional grant funding from government is welcome, it still falls far short of meeting the growing costs and rising demand for essential services such as housing, adult social care and children’s services.

Even with extra money from government grants and council tax, the council is still facing a serious shortfall. By 2026/27, we need to find £10.95 million to cover the gap left from the previous year and to make sure the council can balance its budget.

This doesn’t mean cutting vital services that people rely on. Instead, the focus will be on working more efficiently, reducing duplicated work, updating outdated systems, and finding new ways to bring in income.

Taking these actions now is necessary to protect our most vulnerable residents and to keep delivering the long-term goals set out in Luton 2040.

A full list of the savings being recommended for the 2026/27 budget can be found here.

Tell us what you think

Whether you are a resident or a business, there is still time to share your thoughts or suggestions regarding our budget plans for the coming year.

You can do this by emailing [email protected] The deadline for providing feedback on the draft budget is Wednesday 4 February 2026.

The full 2026/27 budget proposals can be found on our website.