Hertfordshire County Council estimates the latest funding announcements from central government could leave the authority £40m a year worse off by the end of the three-year settlement period.

Officials received details of their allocation from the Ministry of Housing, Communities and Local Government (MHCLG) on Thursday (December 18).

They are looking at the data to determine what the impact will be on the provision of council services, which include education, social care, waste disposal and highways.

Leader of the county council, Cllr Steve Jarvis, said changes to the system meant it would take some time to fully understand the implications of the allocation, which now covers multiple years.

But estimates suggested, he said, those changes could mean Hertfordshire will lose more than £40m-a-year of grant funding by the end of the settlement period, which runs until March 2029.

"We are reviewing the details of the government's Local Government Finance Settlement and considering the implications for our finances," said Liberal Democrat Cllr Jarvis.

"This year's settlement is the first for over a decade, which covers multiple years.

"It is highly complex and fundamentally changes the allocation system, so it will take some time to fully understand the impact on us.

"However, our initial assessment is that the government's new funding methodology means Hertfordshire will lose over £40 million of grant funding a year by the end of this settlement period.

"We have been expecting the so-called Fair Funding policy to have an adverse impact on our finances and have based our detailed budget planning on these assumptions.

"Our priority remains to set a budget which is affordable and enables us to deliver our ambitious priorities for Hertfordshire's residents."

Overall, the Government says the provisional local government finance settlement will provide £78billion for councils nationwide in 2026/7.

Labour says it is the first part of a multi-year funding settlement that is designed to give councils financial certainty.

According to MHCLG, councils are now being funded using an "evidence-based" system, that's designed to recognise local circumstances and the cost of providing services in deprived communities.

The most deprived areas in the country are expected to see a 24% per head boost to funding as a result.

Nevertheless, all councils, the Government claims , will be protected financially during this change, with changes being phased in gradually to keep services running smoothly for residents.

Commenting on the allocations, Minister of State for Local Government and Homelessness, Alison McGovern, said: "Deprivation doesn't happen by accident – it's the result of years of broken systems and wrong priorities.

"This settlement tackles that head-on by directing funding where it's needed most.

"By fixing the link between funding and deprivation, we're giving local areas the tools to create opportunities, support families, and rebuild the services that hold communities together.

"This is how we deliver a fairer Britain where everyone has the chance to succeed."

Council tax rises will still be capped at three per cent per year, with an additional 2% allowed for adult social care.

But in exceptional cases, councils can apply to raise taxes above these limits – so long as their bills are not already above average.

Hertfordshire County Council is currently drawing up draft budget proposals for 2026/7, which are expected to be published in January.

Following a period of scrutiny by councillors, the budget proposals will be considered by a meeting of the county council, which is scheduled for February 17.