Saturday, 19 January 2013

Council Tax Subsidy

In the draft budget proposals we have recently published for 2013/14 (see below) we have indicated our intention to reject the Government offer of a 1 year council tax subsidy. The effect of the subsidy would be to increase our funding from the Government by the equivalent of a 1% council tax increase. It is conditional on an agreement to make no further council tax increase for the coming year. This is the third year that a subsidy has been on offer but each year the terms of the proposal have worsened. 2 years ago the subsidy was offered for the remainder of the current government spending review period, last year whilst only a 1 year subsidy it was for 2%. Each year we have spent considerable time reflecting on whether the subsidy should be accepted and for the last 2 years we have done so. This has been in the recognition that it has given something of a double whammy - as the subsidies reach the end of their respective terms this means that the level of saving that has to be found at that point increases by the amount of the subsidy. In addition the subsidies are not included in the Council's base budget which means that when council tax is raised in the future the rise is based on  a % of a lower base generating less additional income. This effect has to be balanced against the tough times many of our residents are facing and our wish to keep council tax payments as low as possible. This year we have formed the view that the balance has changed and the need to protect services is greater. We are currently sugesting a council tax increase of 1.75% (38p per week to a band D property) and it will be interesting to see where we have reached by the time the budget is agreed by Council.

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