Council leader forecasts three percent council tax rise in face of £18m budget shortfall

Councillor Chris Read, leader of RMBC. told a scrutiny meeting today that to make up for the shortfall through council tax alone, the bill would have to be raised by 12 per cent- adding that this is “not the solution.”

Under current rules, any authorities wishing to raise council tax by more than three percent must hold a referendum – but Rishi Sunak and Jeremy Hunt will reportedly allow councils to hike the levy by nearly five per cent without the need for a vote in the Autumn budget, due to be announced tomorrow.

According to The Daily Telegraph, the chancellor may allow councils to hike taxes by 4.99 per cent, meaning those in Band D will pay up to £100 extra.

RMBC, like many councils across the country, is predicting a shortfall in its finances, in part due to the war in Ukraine, inflation, energy price increases and the impact of the 2022/23 pay award. A report states that the council is expecting to use its reserves to cover the shortfall in the medium term.

RMBC is not expecting additional funding from the Government to help mitigate the costs, and instead anticipates a potential reduction in Government funding.

The report puts the overspend down to placement pressures within children and young people’s services; the cost of school transport; and economic recovery from the Covid-19 pandemic.

Coun Read added: “We cannot stop at an £18m overspend, knowing that we are likely to face budget shortfalls.

“That number will, I think some down, there is a big piece of work going on across the council around where can we choose not to spend money this year, where can we delay spending, where can we hold off things that we don’t need to do now, that minimises the impact on services.

“We’re not talking about service cuts or service changes at this stage.

“We don’t know what he government’s going to do in terms of a referendum, they floated this kite in the press about lifting the cap.

“We have an assumption in our budget that we will do a three percent increase this year. Two percent on council tax and one percent on the social care levy.

“None of us want to do it – if I could take the three percent out I’d take the three percent out and put money in people’s pockets.

“If we were trying to balance our budget out of council tax, that would be a 12 percent rise – can’t do it, don’t want to do it, lots of people wouldn’t be able to pay it.

“Council tax in the end isn’t a solution, it’s just got to be part of the mix around raising revenue, so we’re not cutting services for people who need it.

“It [the report] assumes that the government is going to neither give us more money nor make things worse.”