Council tax to rise by 4.5% as civic chiefs outline how cash will be spent

City councillors have signed off budget plans for the coming year, including another council tax rise and investment into frontline services, local infrastructure and communities.

- by Chris Binding

Cllr Michael Mordey, leader of Sunderland City Council. Lib Dem leader Cllr Paul Edgeworth. Tory leader Cllr Antony Mullen.

Sunderland City Council voted to approve a budget which includes a council tax rise of 4.5 per cent for core council services from April 2026.

This is made up of a 2.5 per cent rise in core council tax for hundreds of day-to-day council services and a two per cent Government levy earmarked for adult social care services, with the increases expected to raise millions of pounds towards these vital services.

As part of the 2026-27 budget, the city council is expected to make cost savings of around £600,000 along with an "increased use of reserves" of £9.679million to balance the books.

Spending plans for next year fall against a backdrop of cost pressures and commitments around pay, energy and inflation, demand in adult and children's social care and supported housing and homelessness.

Under new funding arrangements for councils from 2026-27, the local authority received a multiyear settlement from Central Government with the phasing in of new allocations over three years which aim to help councils better manage finances over the medium-term.

There were previously concerns that some councils, including Sunderland, could see reductions in Government funding under the new arrangements, and a provisional Government funding settlement discussed by senior councillors in recent months indicated the council could lose out on funding.

However, a report discussed by the local authority's Labour cabinet confirmed that there had been an "uplift" in funding following lobbying and that a number of city priorities were set to receive additional resources.

This included extra funding to tackle potholes across the city's road network and expanding the city council's network of targeted community safety hubs.