Isle Of Wight Council Reveals Draft 2026/27 Budget Amid £20 Million Deficit

The Isle of Wight Council has unveiled its draft budget for 2026/27, outlining significant savings, service changes and investment priorities as it grapples with what it describes as unprecedented financial pressures.

The proposals will now be reviewed by the Policy, Finance and Resources Committee before going to Full Council for final decisions later this month.

Rising Costs And Funding Disadvantage

Council leaders say the authority is facing a structural budget deficit of £20 million in the coming financial year, driven by rising demand for services, escalating contract costs and what they describe as an unfavourable national funding settlement.

Among the biggest pressures are:

• A sharp increase in demand and complexity within adult and children’s social care

• Significant rises in the cost of waste collection and disposal contracts

• National funding levels that the council says do not adequately reflect the Island’s higher cost of delivering services

Delivering services on the Isle of Wight presents unique financial challenges, including higher transport costs, limited contractor availability and the need to provide all statutory services locally rather than sharing provision with neighbouring areas.

Since 2010, the council has already delivered around £100 million in savings.

A further £6.2 million in savings has been identified in the latest draft budget, but officials say this alone will not close the gap.

Exceptional Financial Support Sought

To ensure it can set a lawful budget and avoid emergency measures, such as issuing a Section 114 notice, the council has applied for Exceptional Financial Support from the Government.

This would allow access to borrowing to plug the remaining gap.

However, the council warns this would only provide short-term relief and would need to be repaid with interest, alongside further savings and organisational reforms overseen by an independent board.

Proposed Changes Across Services

No final decisions have yet been made, but the draft budget includes several proposed measures:

• A 4.99 per cent increase in council tax — the maximum permitted without a referendum

• Efficiency savings and service changes in adult and children’s social care

• Increases to some fees and charges, including parking and the Cowes Floating Bridge

• The introduction of new parking charges in certain areas

• Adjustments to waste collection and public realm services

• Changes to some non-statutory services

• Closure of Newport Roman Villa to the public, while maintaining the site

• A reduction and reprioritisation of capital spending

• A cross-council staffing reduction programme, including redeployment and voluntary redundancy options

Continued Investment In Key Infrastructure And Services

Despite the financial pressures, the council says it will continue investing in essential infrastructure and services through its capital programme.

Plans include:

• Major improvements to children’s services, including upgrades to Beaulieu House and new emergency accommodation

• New coastal defence projects to protect vulnerable seafront areas

• Playground refurbishments and public realm improvements

• Highway safety upgrades, drainage works and flood prevention schemes

• Improvements to public facilities, including the crematorium and schools

• Expansion of assisted technology through Wightcare to help vulnerable residents live independently

The council says most of these projects are funded through ring-fenced grants and cannot be used to support day-to-day service costs.

Decisions Due Later This Month

The draft budget will be considered by councillors on Friday, 20 February, before a final decision is made at a Full Council meeting on Wednesday, 25 February.

Council officials say the measures are necessary to ensure long-term financial stability while continuing to deliver essential services to Island residents.