The council spends around £500 million providing services for residents and businesses in Herefordshire and we fund the expenditure from a variety of sources.

Explanation of funding streams

Business rates

We have a legal duty to collect business rates and retain 49 percent of the amount collected. 50 percent of the rates collected are paid to central government and the remaining 1 percent is paid to Hereford and Worcester Fire Authority.

The 2026 reset will be delivered alongside significant changes to the business rates tax system. New business rate multipliers will be introduced into the business rates system, with the introduction of additional business rates multipliers, and a revaluation of business rates will also be delivered.

Council Tax

In addition to funding our services, the Council Tax that we collect supports Hereford and Worcester Fire and Rescue Authority, West Mercia Police and parish and town councils.

Grant income

Funding that is awarded from government departments and other non-government organisations to support services to Herefordshire residents.

Reserves

Funding that has been set aside from previous years to help fund expenditure in future years.

Revenue Support Grant

The Local Government Settlement for 2025/26 received in December 2025 represents a multi-year settlement outlining multiple years' allocations of funding covering the three-year period from 2026/27 to 2028/29. Funding allocations for the settlement period have been determined through the Fair Funding Review 2.0.

Service area funding

Income received for specific areas such as the Dedicated Schools Grant for funding our schools, Better Care Fund for funding services to vulnerable people and income generated through charging for certain services.