2% or 6% Council Tax Rise?

As a member of the Cabinet at Cornwall Council we as a collective have set our provisional budget for 2014/15. This includes a 1.97% rise in Council Tax for this period. This is to deal with £19m budgeted savings and the extra £23.9m that has to be found for this period. This is not the only pain, as £196m has to be found in the next five years which includes up to £50m for the 2015/16 period.

However, the stance of 1.97% rise  is not fully supported throughout the entire membership of the council. As some members want another year of Council Tax freeze and now, a group of Councillors within the council want to see a 6% rise. The point of a rise is an interesting one, as you could rise Council Tax to provide and safeguard those services. But the flip-side is can people afford the rise?

I always like to put the impact of a rise into pound, shillings and pence. A 6% rise would result in a rise of about £1.40 per week on a Band D property. A 1.97% is roughly 42p per week.

For those who don’t know it, for every 1% increase raises just over £2m in revenue. So to protect all services, Council Tax would have to rise by a lot. For instance you would have to put up Council Tax about 19% to cover the cuts in the 2014/15 period.

You could argue the merit of looking at a bigger rise, but Government rules on rising Council Tax forbids a council from rising it above the 2% threshold without a referendum. The sting in the tail is a referendum will cost £920k. And you would still have to find this money from the existing budget if you lose the referendum. Even if the council agreed to the principle of a 6% rise, the council would still have to find roughly £15m of the £19m worth of extra cuts.

My view on this is two-fold. A 6% rise would be difficult to win on a referendum as households are already feeling the pinch; and finding the extra money over still massive cuts could be a step too far for many. I believe a 1.97% rise is right. But I do acknowledge there needs to be a bigger discussion on the 2015/16 budget and having to find up to £50m worth of savings.

What do you think?


One comment

  • Dear Councillor Wallis,

    Would it not help GREATLY. ,if CC followed the EUNOMIA. Report recommendations and saved the Council £20 M a year , year on year, than remain throttled by SITA for 30 more years, having to further bear further costs, when SITA, finds itself unable to import the required amount of waste to keep their incinerator going and demands CC contribute to extra costs.

    None of these arrangements with SITA are affordable.

    Maybe Councillors do not know that ordinary working people are insufficiently moneyed to carry CC mistakes forward.

    Hilda Dent , St Minver. PL 27 6 PJ

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