Cheshire East has been refused permission to hike up council tax by 9.99 per cent.

It is the second year in a row the government has turned down the council's request to raise the tax above the maximum 4.99 per cent level without a referendum.

The cash-strapped council, which in October had forecast an £18.2 million funding gap for 2026/27, has now put the estimated shortfall at £30.9m.

On Tuesday, February 10, a Cheshire East spokesperson told the Local Democracy Reporting Service: "The request to increase council tax was one option for councillors to consider through the council's budget setting process, which the council recognised as requiring permission from central government.

"Councillors will now work to agree a budget through the remaining options, including a request for additional exceptional financial support, which is subject to a further government decision, and a range of budget proposals for savings, income and growth, and feedback from public consultation and engagement through the annual budget setting process.

"Also announced by government yesterday was the high needs stability grant which is due to bring a betterment of £2.7 million in 2026/27 and the £5.3 million in 2027/28 to council financial position."

Cllr Chris O'Leary (Sutton, Con), the opposition spokesperson for finance, said the local government finance settlement was 'good news and bad news' for Cheshire East.

With regard to the council tax aspect, Cllr O'Leary said: "The good news is that the Labour government have refused the request from Labour/Independent-run Cheshire East Council to raise the council tax by 9.99 per cent in 2026/27.

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"This means that the borough's taxi drivers, factory workers, shop assistants, police officers, nurses, and teachers will not see their council tax rise by nearly four times the rate of inflation."

But he added: "This does however mean that the council will now need to borrow £30m for 2026/27 just to cover day to day costs.

"The failure of the transformation programme to deliver £14m in savings this year, plus the additional approximate £10m in costs of dealing with Labour's failures on the borough's children's services – the inadequate rating and the costs of services the DSG SEND debt – almost entirely explain that gap."