Council tax hike? Bankruptcy? Doncaster Council's £7million projected overspend explained

The City of Doncaster Council is projecting a £7million overspend by the end of this financial year, amid financial pressures on budgets in adult social care and waste.

Council officials are clearly concerned about the financial challenge Doncaster is facing and urged directors to ‘actively identify opportunities to reduce expenditure’ just two months into the year.

But the reports explaining these issues are written by in-the-know officers and are often full of jargon and layered with facts, figures and targets.

So what does this latest overspend figure mean?

How big is a £7million overspend?

Every February, Doncaster Council sets two budgets: the revenue budget and capital budget.

Capital budgets get the headlines. They build and buy things. It is spending you can physically see – such as Gateway One, the building currently being constructed next to Doncaster Station.

Whereas the revenue budget you often don’t see – funding the day-to-day running costs – but it is the bigger of the two.

Quarterly finance reports, like the one discussed this week, provides updates on the revenue budget, meaning the projected overspend of £7m relates to that.

In February 2026, councillors approved a revenue budget which totalled £749.50m.

Many of you will very quickly have figured out that the overspend is therefore just less than one per cent.

Politics is all about different ideas and viewpoints. Some may have just decided that one per cent is insignificant, while others will note that the council has only £5.6m in contingency funding approved in February’s budget.

Will the council go bankrupt?

No. A £7million overspend will not bankrupt Doncaster Council.

The projected overspend is likely to change as we progress through the year, but it will need to get much, much worse before the chief financial officer, Faye Tyas, needs to think about the dreaded Section 114 – the bankruptcy notice.

This time last year, the projected overspend was slightly lower than this year at £6.6m. By the end of 2025/26 in March, the overspend was £1.2m.

That £1.2m was subsequently balanced using council reserves, a common fix for overspends at councils across the country. However, reserves are not infinite, so councils cannot do this forever.

Will there be a massive council tax hike next year?

The difficult financial position for councils across the country means your council tax is likely to go up again next year, regardless of whether there’s an overspend or underspend.

Part of this is because the settlement given to councils by the UK Government is calculated on the assumption that each council will put local taxes up by the maximum allowed amount of 4.99 per cent.

But, similarly to the previous answer, the current financial position will need to drastically worsen for the council to even remotely have the chance to hike council tax beyond the maximum.

Based on the current position, it seems unlikely that Reform UK will be able to prevent another maximum hike for 2027/28 as they did for this year.

Is this overspend likely to affect my day-to-day life?

In short, no. Your bins will still be collected; potholes will still be filled; children will still be cared for; adult social care will continue to visit the people that need it; and council staff will still be paid.

However, it is important for people to remain up to date with the financial position their local authority is in.

Doncaster Council is no longer in the dire financial situation it faced 15-20 years ago. But we are seeing more and more councils across the country in serious financial trouble. Birmingham is the best-known example in recent memory.

There is no suggestion Doncaster Council will be in that position, but those councils are the reason why residents should be monitoring how the council spends the money paid in their taxes.