Lincolnshire County Council has raised concerns over proposed government reforms that could see the county receive even less funding for local services due to its historically low council tax rates.

Under the new system, councils with lower council tax bills would receive reduced government grants, while those that have raised taxes would be rewarded with more funding.

Council leader Cllr Martin Hill OBE warned that the change could further disadvantage Lincolnshire, which already receives less per head than many urban areas. “We estimate that Lincolnshire would get an additional £120m a year if we received our fair share of national funding,” he said.

He also criticised the government’s recent decision to cut the £9m Rural Services Delivery Grant and introduce a new Recovery Grant, from which Lincolnshire received nothing. “Extra money from this grant was instead handed to big cities, such as Birmingham and Leeds, compounding the problem of rural underfunding,” he added.

The council is now consulting on council tax proposals for 2025/26, considering three possible increases:

• 2.99% rise, using £9.7m of reserves/additional savings
• 3.99% rise, using £5.8m of reserves/additional savings
• 4.99% rise, using £1.8m of reserves/additional savings

Despite financial pressures, the council’s Executive has stated its preference for a 2.99% increase to minimise the impact on residents while maintaining services.

Cllr Hill said: “We know families are struggling with the cost of living, so we are reluctant to pass the burden onto residents. However, further reducing our funding would place even greater pressure on the vital services they rely on.”

Residents can share their views on the budget proposals through the council’s consultation process.