The council’s robust approach to financial management has maintained a relatively stable financial position in recent years.
Strong financial management was also a key feature of the recent Corporate Peer Challenge and the External Auditor’s Value for Money report to the Governance and Audit Committee on 3 December 2025.
The decade of cuts to local government funding from 2010 to 2020 under previous governments mean that the local government sector as a whole is significantly underfunded.
The Government consulted on local government funding in June 2025 through their Fair Funding Review, presenting an opportunity to address the enormous pressures faced by the council after a decade in which the most deprived local authorities were hit with the deepest and most severe cuts in funding.
On 9 February 2026 the Government announced the Final 2026/27 Local Government Finance Settlement, confirming a significant improvement in Knowsley’s allocations compared to the Provisional figures shared in December 2025.
Cllr Jayne Lonergan, Cabinet Member for Resources, said:
“We have been lobbying hard to ensure that areas like Knowsley receive the funding they need to support their communities.
“Under the Final Settlement, Knowsley’s funding will increase by 21% over the first 4 years of the Labour Government.
“I’m really pleased that we have been listened to and the Government’s response means that we can effectively now plan for the next three years.”
For 2026/2027, the council has once again been able to set a balanced budget without making any significant cuts to front-line services.
As part of the budget, the council has invested significantly to meet the increasing demand for services, and the costs of delivering those services.
For the 2026/2027 budget, the council will be investing over £29m including £12.2m for Children’s and Adult Social Care, Special Educational Needs and / or Disabilities and Home to School transport services; £4.5m to improve stability in the social care market and £8.1m to support pay and price inflation as well as new statutory requirements (including food waste recycling) and £3.9m to increase capacity in Children’s Social Care.
Cllr Lonergan added:
“The Council has also reviewed its Council Tax Reduction Scheme and this will see a further £0.5m go into the pockets of those residents who need it most, in addition to introducing the Government’s Crisis and Resilience Fund that will provide £3.7m of support also.”
On top of this, the council’s capital programme includes plans to spend £124m on capital schemes, including £56m which is programmed for next year. This includes:-
- Decarbonisation and Improvements at Halewood Leisure Centre
- New equipment and refurbishment for Better Youth Spaces
- Our continued programme of highways improvements across the Borough
- Continued work on the Alt Bridge School Expansion
- Jubilee Park Hub and Play Project
- Continued improvements in our town centres
In addition, Council endorsed the Pay Policy for 2026/2027 which continues the council’s commitment to pay the Real Living Wage – increasing from £12.60 per hour to £13.45 per hour with effect from 1 April 2026.
In setting its 2026/2027 budget, the council has had to deal with significant pressures from rising costs and increasing demand, as well as investing to improve key services. To help fund these costs, the Government expects councils to raise Council Tax by 2.99%, with a further Adult Social Care precept of 2%, resulting in a total increase of 4.99%. If the council did not increase Council Tax in the way the Government requires, then it would lose £4m of funding every year and would be more likely to have to cut services and jobs in the future.
Cllr Lonergan said:
“It’s essential that we can continue to invest in the services and support that our residents need and value. With the increasing demand for our services, we’ll continue to develop and implement improvements which will deliver the best outcomes for our residents.
“Looking ahead, we’re developing a transformation programme to meet the anticipated shortfalls in our budget from 2027 which will look at how our resources can be best utilised and how we can meet demand and rising costs relating to residential placements in Children’s Services.
“We are in a stable financial position, thanks to our robust financial management, which is ensuring that our residents continue to receive the best support and services.”