Liberal Democrats vote against Reading Council budget over governance failures and financial fragility

Reading's Liberal Democrat councillors have voted against the Council's 2026/27 budget, citing concerns over depleted reserves and last-minute financial planning that leaves future years unbalanced.

Speaking at last night's Full Council meeting, the three Lib Dem councillors challenged the Labour administration over a budget that was only balanced two weeks earlier through an emergency £3.6 million draw from the Financial Resilience Reserve, leaving the Financial Resilience Reserve set to fall to just £269,000 by 2027/28.

Reserves running on empty

Councillor Anne Thompson highlighted the scale of the Council's financial pressures: "To balance the budget, we will draw down £7.302 million from reserves — almost double the size of the drawdown a year ago. Our reserves are shrinking. The General Fund Revenue Reserve has fallen from £49.8 million to a forecast of £30.2 million in just one year, a 39% decline. You don't have to be a mathematical genius to know that this can't go on much longer."

Cllr Thompson criticised the government's funding settlement, noting that Reading receives nothing from the £865 million Recovery Grant despite having above-average deprivation in income, education, crime and barriers to housing. "Had the Recovery Grant been distributed through the fair funding formula as originally intended, Reading would have received an additional £2.05 million. That is a deliberate political choice by the Labour government in Westminster, and it is not fair."

She added: "Our Adult Social Care caseload has grown by 311 people in nine months. Our looked after children numbers are rising when numbers are falling nationally. Yet we have three Labour MPs. Where were their voices for Reading when these decisions were being made?"

Last-minute budget raises concerns

Councillor James Moore focused on the administration's handling of the budget: "This budget was not balanced in December. It had a £4.4 million gap as recently as ten weeks ago. It was only finally closed two weeks before this meeting by drawing an additional £3.6 million from reserves at the last minute. That is not long-term planning. That is firefighting."

Cllr Moore pointed to a pattern of financial management problems: "Year after year of overspending — £9.3 million last year, £4 million forecast this year. Year after year of underdelivering on savings. The savings programme has delivered 73% of what was planned last year, and KPMG's own forward look suggests only 66% will be delivered this year."

He highlighted what he described as misplaced priorities: "We have requested a hearing loop system for Tilehurst Community Centre — a permanent accessibility improvement that would benefit the one in six people in the UK who suffer from hearing impairment. We've been told there are cost pressures that prevent it. Yet there were no cost pressures when it came to funding the Mayor's £920 flight to watch football in Germany last year."

Council Tax rises continue

The budget approved by the Labour-controlled council includes a 4.99% Council Tax increase — the maximum permissible without a referendum — for the third consecutive year. For a typical Band C household, the Reading element of Council Tax will rise by around £94 per year.

Cllr Thompson noted that public support for the increases is weakening: "The budget engagement showed 50.5% of respondents now oppose the Council Tax increase — a significant shift from last year when 60% supported it."

Future years unbalanced

Despite the reserve draw, the Medium Term Financial Strategy shows budget gaps of £1.996 million in 2027/28 and £207,000 in 2028/29 still to be found.

All three Liberal Democrat councillors voted against the budget.