NALC secures referendum exemption for parish and town councils

We welcome the government's decision to formally exclude parish and town councils from referendum principles on excessive council tax increases for the 2026/27 financial year.

The confirmation, published this week as part of the Local Government Finance Settlement for 2026/27, follows our representations urging ministers to exempt parish and town councils from the referendum threshold to give them the certainty they need to set responsible and transparent budgets for the year ahead. The government's decision reflects a clear recognition of the unique role and funding position of the parish and town sector.

Responding to the consultation, we made the case that parish and town councils and other councils at all tiers should be able to set council tax and precept levels without the constant risk of government intervention. This principle is particularly critical for parish and town councils, whose precept is their primary and often only source of income.

Parish and town councils account for just around 2 per cent of England's total council tax in 2025/26. Yet, they deliver a wide range of essential local services and community support. Unlike principal authorities, they do not receive a revenue support grant, a share of business rates, or routine access to government grant funding. The exemption from referendum principles therefore provides much-needed stability, enabling parish and town councils to plan and continue serving their communities effectively.