High Peak Borough to accept Government council tax bribe

From Caitlin’s blog : www.caitlinbisknell.info

Like all councils up and down the country High Peak is working on its Budget for 2012/13. And like most councils we are recommending a 0% council tax rise. Given the impact for the future funding of services in High Peak, this is not a decision that can be taken lightly.

In recent years much of the focus around council budgets has been on the size of the increase in council tax. In some ways things are no different this year. Residents rightly want high quality services at an affordable price and given the economic pressures everyone is facing, there is a push for all councils to agree not to increase council tax.

So let’s look at the figures. Although High Peak Borough Council sends out the bills and collects the council tax, only 12% of the bill comes to the borough; 72% goes to Derbyshire County Council; 11% to Derbyshire Police; 4% to the Fire and Rescue Service; and 1% to town and parish councils.

Thus for 2011/12, HPBC received £174.42 for an average Band D property; that’s £15 per month or £3.35 per week. A Council Tax increase of 2.5% would see the amount households pay to HPBC rise by just £4.30 a year; that’s 36p per month or 8p per week – again for an average Band D property. Across the borough as a whole it would bring in around £149,000 per year. So we are not talking huge sums.

However, to say that the Government has given councils a dilemma is putting it mildy! In fact what the Tories are doing is placing a smoking timebomb in the middle of council finances.

Last year, it offered to pay a bribe equivalent to a 2.5% council tax rise for four years to all councils who agreed to set a 0% council tax for 2011/12. This year, it has offered to fund the equivalent of a 2.5% council tax rise but this time the funding is for one year only. Both are time limited – and so cannot be built into the council’s base budget.

This puts councils in a very difficult position as it leads to a year on year loss in income – and for residents that could mean poorer quality or fewer services.

It means that, when it comes to setting its budget for 2015-16, it will be based on the Council’s budget for 2010-11, which will be more than half a million pounds less than if it had raised its council tax by 2.5% each year.

So, in effect what looks like a helping hand, is actually a further cut on top the £3m cuts the council was forced to find last year and this year.  And with the Government struggling to make cuts elsewhere it is highly likely that it will again look to local government to make yet more cuts.

As Ed Balls told Labour councillors this week, where some ministers defended their departments against savage cuts; Mr Pickles offered up local government as a sacrificial lamb!

Locally the both the Tories and LibDems have made it clear that they too want a 0% council tax rise – purely because it is Coalition policy.

Further councils, like everyone have to pay the extra costs of inflation and higher utility bills. Even a 2.5% council tax rise does not cover the cost of inflation, currently running at 4.2%, down from 4.8% in November.

S0, we have based our budget on a 0% council tax rise and will therefore accept the Government’s bribe of the equivalent of a 2.5% council rise. Whether we can continue to do that, given the almost certain impact on services, is a very different question.