Politics
Local Government Finance Bill 2026: St Albans Funding Formula Compared to Other Hertfordshire Districts
The legislation sets new grant allocation rules that adjust council resources in St Albans differently from those applied in Watford and Stevenage.
How we reported this
The Local Government Finance Bill 2026 introduces revised grant distribution formulas that alter central funding for district councils, directly affecting St Albans City Council revenue from April 2027. Residents in the district will see shifts in the balance between council tax and central support for services such as planning, waste and parks.
Why the change arrives in 2026
Parliament published the bill text on 15 June 2026 after the Treasury completed its multi-year spending review. The measure replaces elements of the 2013 settlement that had frozen baseline grants for many shire districts. St Albans currently draws 38 percent of its net budget from the revenue support grant, a figure recorded in the council’s 2025-26 budget papers.
Under the new formula, allocations incorporate updated population and business-rate growth data collected by the Office for National Statistics in 2025. St Albans recorded 3.2 percent business-rate growth last year, higher than the 2.1 percent average across the county. This places the district in a different band from Watford, which posted 1.8 percent growth, and Stevenage, which recorded 2.7 percent.
Effects on daily services and household costs
St Albans households pay an average Band D council tax of £1,892 in 2026-27. The legislation caps any council-tax increase tied to grant loss at 2.99 percent without a referendum. Neighbouring districts face the same cap, yet their starting grant reductions differ: Watford is projected to lose £1.4 million while St Albans loses £920,000, according to the Department for Levelling Up, Housing and Communities impact assessment published alongside the bill.
Local advocates note that the variance arises because St Albans retains a larger share of retained business rates under the revised safety-net threshold. The legislation states that districts above the median growth threshold keep 60 percent of additional rates rather than the previous 50 percent. This adjustment is expected to offset part of the grant reduction for St Albans but not for councils below the threshold.
The bill receives its second reading on 22 July 2026. Committee stage begins in September, after which the government has said it will publish final grant tables for each district before the autumn budget statement.