Council tax increases
2018/19 is the third year of the government’s 4 year financial settlement for local authorities. By April 2020 the council will receive no government grant to support its day to day services. Instead, it will be reliant on income from council tax and a share of the rates payable by businesses based in the local area.
As a consequence of the reducing government support and the continuing increase in demand for the services we provide, the council faces a potential funding shortfall of £20m over the next 2 years. In this context, setting the council’s budget and council tax for 2018/19 and planning for the years beyond is a very challenging task.
Like many local authorities, we are facing an unprecedented increase in the number of children being taken into the council’s care as well as the impact of an ageing population on social care services. In the last 12 months alone the costs of supporting vulnerable people – one of the council’s most important roles – has increased by £4m.
The government has acknowledged the impact these pressures are having on council budgets. Its response has been to give councils more flexibility to raise council tax to help mitigate them. Increases of up to 3% to cover general pressures and those from children’s social care are now permitted plus a further 3% specifically to help pay for the rising costs of adult social care services. The government’s financial model anticipates all local authorities with social care responsibilities using this higher rate to help fund costs.
We have looked at other options available before considering the level of council tax. Our 2018/19 budget includes £6.5m of savings from our transformation programme. This is being achieved by taking a different approach to securing services that residents value, for example by outsourcing the management of our leisure facilities which will happen in March. We are also introducing innovative ways of supporting the care needs of individuals, giving people appropriate short-term support sooner that will reduce the need for expensive longer-term support services.
We have also identified a further £3m of smaller scale efficiency savings and extra income. Through careful financial management, the council is also able to use £2.5m of reserves to help balance the budget and avoid the need to close any existing facilities. However, despite these measures, next year’s budget is based upon a council tax increase of 5.99%, which will contribute the remaining £3.2m towards the overall gap. The total increase represents £1.38 per week for an average Band D property.
The council understands that no increase in council tax is welcome. We will, of course, continue to review and transform all our services for residents in order to both reduce their cost and secure a sustainable future for them.