As the UK closes out another fiscal year, a tale of two budgets is unfolding—one at the national level, marked by record-breaking surpluses and economic optimism, and another at the local level, where North Northamptonshire Council has just approved a controversial council tax hike to shore up its own finances. Both stories, while seemingly disparate, reflect the broader challenges and priorities facing Britain as it navigates economic recovery and local governance in 2026.
On February 20, 2026, the North Northamptonshire Council voted to approve its annual budget for the 2026/27 financial year, setting the stage for a new round of fiscal decisions that will directly impact residents. The council’s total budget for the coming year is £432.5 million, a sum intended to cover day-to-day services ranging from waste collection to social care. But it’s the decision to increase council tax by the maximum allowable amount—4.99%, including a 2% precept for adult social care—that’s generating the loudest buzz.
For the average band D property in the area, this means a new council tax bill of £1,918.23, up by £91.17 from the previous year. According to the BBC, this marks the first budget crafted by the council since Reform UK took control at the local elections in May, and it’s already drawing sharp scrutiny from political rivals and residents alike.
Graham Cheatley, the council’s executive member for finance, efficiency, and change, defended the move, stating, “This budget sets out a responsible, realistic and sustainable financial path for our council, at a time of unprecedented pressures.” The pressures he refers to are not insignificant—local authorities across the country are grappling with rising costs, increased demand for services, and the ever-present uncertainty of government funding.
Cheatley emphasized that the council’s primary focus has been to “deliver financial stability, while protecting essential services, supporting our most vulnerable residents, and investing in our future.” Yet, not everyone is convinced that the council’s approach aligns with its campaign promises.
Helen Harrison, leader of the council’s Conservative group, was quick to point out what she sees as a breach of trust. “It is my intention to examine this budget with reference to the pledges and criticisms that they made during the local elections last year. I will show you that they have broken their promises and the Conservative amendments are to help them to get closer to the promises they made.”
The Conservative group had proposed an amendment to reduce the council tax increase to 3.99%, suggesting that the extra funds needed could be drawn from the newly introduced £2.4 million corporate contingency budget. This budget was only added after the government’s fair funding settlement was announced, providing a cushion for unforeseen costs and overspends. However, the amendment was rejected by the majority, and the higher rate prevailed.
Residents will also see a hike in fees for garden waste collections, with the annual charge set to rise from £50 to £62 starting in April 2026. It’s a small detail, perhaps, but one that’s likely to be felt in households already adjusting to higher living costs.
While local leaders in North Northamptonshire wrestle with these tough decisions, the national picture tells a markedly different story. On the same day as the council’s budget approval, Bloomberg reported that the UK government had posted its biggest budget surplus on record, a development that’s sure to catch the attention of fiscal hawks and political strategists alike.
According to TradingView, public sector net borrowing—excluding public sector banks—recorded a £30.4 billion surplus in January 2026. That’s more than double the £14.5 billion surplus from January 2025 and far above the expected £23.8 billion. The Office for Budget Responsibility had forecast public sector net borrowing for the first ten months of the fiscal year at £120.4 billion, but the actual figure came in at £112.1 billion, offering the government some much-needed fiscal breathing room.
This record surplus, the largest since records began in 1993, is being credited to a combination of strong capital gains tax inflows and lower debt interest payments. Companies and individuals, anticipating planned tax increases, rushed to complete asset sales ahead of the changes, resulting in a surge of receipts during the peak tax collection month. At the same time, the government’s debt interest payments remained subdued, helping to keep expenditure growth in check.
Louise Moon, reporting for Bloomberg UK, noted, “Britain has posted its biggest budget surplus on record, while retail sales soared. The Chancellor’s long-held dream of reviving the economy might be a small step closer.” It’s a sentiment that captures the cautious optimism of the moment—after years of economic turbulence, the numbers finally seem to be moving in the government’s favor.
But what does this mean for ordinary citizens, especially those in places like North Northamptonshire facing higher local taxes? The juxtaposition is striking: while national coffers swell, local councils are still raising taxes and fees to balance their own books. It’s a reminder that fiscal health at the top doesn’t always translate to immediate relief on the ground.
For Chancellor Rachel Reeves, the record surplus is both a vindication of her economic stewardship and a potential springboard for further reforms. The strong showing in retail sales suggests that consumer confidence is rebounding, giving the government more room to maneuver as it considers future spending and taxation policies.
Yet, the challenges are far from over. Even with a historic surplus, the government faces ongoing pressures to support public services, invest in infrastructure, and address regional disparities. Local councils, meanwhile, must continue to navigate the delicate balance between fiscal responsibility and the needs of their communities.
In North Northamptonshire, the debate over council tax is likely to linger. The Conservative group’s accusations of broken promises and the rejection of their proposed amendment have set the stage for further political wrangling. For residents, the reality is more immediate: higher bills, increased fees, and the hope that these sacrifices will translate into better services and a more stable future.
As Britain looks ahead, the interplay between national achievement and local challenge will remain a defining feature of its economic landscape. The record surplus may dominate headlines, but it’s the decisions made in council chambers like those in North Northamptonshire that will shape the everyday experience of citizens across the country.
For now, the numbers tell a story of progress and pressure, of triumph at the top and tough choices on the ground—a snapshot of modern Britain in 2026.