Civic chiefs said they were "left in the dark" as they pulled together a budget for the next financial year.

Devolution proposals left Cheltenham Borough Council leaders feeling uncertain about the future and guessing as to how they should prepare financially.

They had to draw up a net budget of £19.05million for 2025/26 not knowing if the process to dissolve the council was about to start.

Cabinet and council are due to consider the budget proposals this week, which show it needs £23.48million to run council services for the next year.

If approved it will see council tax rise by 2.99% which will mean band D properties pay an extra £7.11 a year.

The report to councillors said the budget had been drawn up despite "profound existential questions" about Cheltenham Borough Council's future being left unanswered.

Gloucestershire has been in political turmoil since the Labour Government announced its Devolution White Paper in December. Leaders have been at odds over whether the county should be ruled by a single unitary authority.

Cheltenham bosses said they found out just a week before their budget deadline that Gloucerstershire would not be fast-tracked for reform.

Cllr Alisha Lewis, cabinet member for finance and assets, said: "The Government's Devolution White Paper raised more questions than it answered, leaving us in the dark as we shaped the budget. 

"How do you plan for the future when you don't even know how long that future will be?

"For most of the consultation and post-consultation revision period, we were left guessing—would we be abolished in two or three years? Each scenario meant vastly different financial decisions.

"The government finally gave us an answer—just a week before our final budget deadline."

It was announced on February 5 that Gloucestershire had failed in its bid to be part of the first wave of devolution, which would have included delaying the May elections by a year.

Cllr Stephen Davies, leader of Gloucestershire County Council, said he was "disappointed" but would now work with local councils and stakeholders to develop and submit its interim plan for local government reorganisation in the county by 21 March.

Cllr Lewis said despite the uncertainty of the last few weeks, the priorities for Cheltenham "remain clear" and are: investing in Cheltenham, protecting residents, and future-proofing services.

Like all local authorities, it has had to grapple with "immense resourcing challenges", the council said in a statement.

Since 2010/11, local authority spending has fallen from 7.4% to 5% of GDP, and the Office for Budget Responsibility forecasts it will fall to 4.6% in 2028-29.

Since 2022/23, the council has been required to find £5.548m of savings and has used general balances to support the budget.

This budget proposal is the first one for nearly five years where the forecast level of contribution to balances and reserves far exceeds the new savings required.

Savings and additional income of £500,000 are required to contribute £560,000 to general balances and £939,000 to earmarked reserves.

Cllr Lewis said: "This budget safeguards our town's future—from the pensions of our hardworking staff to the homes of our tenants," she added. "No matter what lies ahead, we stand with Cheltenham, committed to delivering the very best services and support for our community."

Looking ahead, Cheltenham Borough Council said the impact of the change to a Labour Government in May and "additional taxation burdens across all sectors" remained unclear.

A fair funding review is expected in Spring 2025 which will seek to redistribute funding to the areas of greatest need.

However, Cheltenham bosses said the volume and complexity of proposed reforms to local government funding was creating "uncertainty" as it was "difficult" to anticipate their outcome.

They include a Spending Review, the promise of a multiyear settlement, funding model reform and business rates modernisation, all over laid with plans for significant structural reorganisation of the sector and further devolution.

Reforms from several other Whitehall departments who own policy responsibility for many services delivered by local councils will also be significant for financial planning, it said.