• Increased investment in Herefordshire’s highways, housing, infrastructure and economy
• Reflects residents’ priorities for roads, protecting vital services and modernising working practices
• Comprehensive plan to close significant funding gap next year caused by the Government’s Fair Funding Review, which reduces rural authorities’ funding.

Herefordshire Council’s final income, expenditure and savings plans have been approved by Full Council on 13 February, with the 2026/27 capital and revenue budgets setting out major investment in the county’s future while protecting vital public services.

Next year’s capital (long-term spending) programme places a strong emphasis on investing in the county’s assets and infrastructure – from roads resurfacing, highways maintenance and housing. Emergency and temporary accommodation received the largest addition to the capital programme in 26/27, meaning, in the future, less reliance on private landlords and reduced revenue budget pressures. There will also be investment in the restoration of the county’s historic buildings and continued support for the Hereford Bypass.

Alongside this long-term investment, the revenue budget sets out a responsible plan that closes a £30 million funding gap next year, due to the outcome of the Fair Funding Review not meeting the costs of the growing and more complex needs of our communities, and rural setting. This new formula equates to Herefordshire residents getting 32% less funding per head from Whitehall than those in urban areas. To balance the budget, the council identified £20 million in savings and approved a 4.99% council tax increase to meet the costs of delivering services to residents. Support for households facing severe hardship will continue.

Next year’s budget reflects what residents told the council during the Budget and Council Tax 2026/27 consultation, with highways being their top priority. In response, the capital programme includes one of the council’s largest ever investments in the roads network, including a £5 million resurfacing programme and more than £24 million in Department for Transport maintenance grants to cut reactive repairs, reduce backlogs and improve road conditions countywide.

Residents also showed strong support for modernising council services, backing more online access and the sale or development of council buildings to reduce costs. In response, the budget accelerates digital access and reduces estate running costs, focusing on efficiencies rather than frontline cuts.

Key investments and measures in the approved budget and capital programme include:

• £10m investment to deliver increased temporary and emergency accommodation to respond to homelessness and housing demand across the county.
• More than £20 million in culture and the visitor economy over the long-term (MTFS period), anchored by the Hereford Museum & Art Gallery redevelopment and restoration of the Shire Hall.
• Supporting Herefordshire’s economy through Rural England Prosperity Fund investment, upgrades to employment sites, and a new inward investment campaign, alongside 30 minutes’ free spring parking in council-operated car parks to help town and city centres.
• Continuing the Children’s Services multi-year improvement and cost-reduction plan – fewer agency roles and lower agency rates, reduced reliance on high-cost placements and a stronger in-county supported accommodation offer.
• Continued investment in natural environment protection, including Public Rights of Way, countryside access and bridge repairs.
• Continued delivery of the council’s two major wetlands schemes to support biodiversity recovery and nutrient neutrality.
• Flood defences – expanded drainage, attenuation and flood alleviation works to strengthen long‑term climate resilience across rural communities.
• Biodiversity enhancements including Ash Dieback management and mandatory carbon‑reduction and environmental assessments for all major capital projects.

Cllr Pete Stoddart, Cabinet Member for Finance and Corporate Services, said: “This budget is about confronting today’s financial reality created by the Government’s so‑called ‘fair’ funding formula, while at the same time addressing residents’ priorities and investing in Herefordshire’s future.

“We are making responsible decisions that allow us to deliver important services, support vulnerable residents and strengthen the local economy. At the same time, we are prioritising the long‑term investment our county desperately needs: better roads, resilient infrastructure, thriving market towns and the preservation of Herefordshire’s beauty and rich heritage.

“Most importantly, this budget is shaped by what people across Herefordshire told us matters most to them. People want better roads, they want essential services protected, and they want us to modernise and work more efficiently rather than cut frontline services. We have listened. Every major element of this budget reflects those priorities.”

The budget proposals approved by Cabinet and reviewed by the Scrutiny Management Board were debated and agreed at Full Council on 13 February.