Should Cornwall Council raise Council Tax above 2%?
The Cabinet and the wider membership of the Council are currently in the process of deciding the budget for 2015/16 and up to 2018. I have said before, this budget is going to be very difficult. As having to find savings of £196m or losing one take one-third of your budget will mean services will be affected.
Setting the budget is made more difficult by the government imposing a 2% cap on the maximum a primary local authority can raise Council Tax. I have never been supportive of an ad-hoc raise, as any raise has to be justified, but when you are faced with such draconian cuts in the face of increased demand, it would be helpful if a Council had the ability to raise income that helps supports services.
The Government talks of devolution and handing powers down to Councils, but when it comes to setting a budget the Government hog-ties a local authority on setting its budget. It should not be up to Westminster in settling the a Council Tax figure, but the local authority.
The current legislation is if a local authority wants to go above the 2% cap, then it needs to hold a public referendum.
One of the issues of holding a referendum is the sheer costs of running one. In Cornwall’s case we would not get much change out of £1.2m if Cornwall Council held a stand-alone referendum. Raising Council Tax by 1% would bring in an income of roughly £2.2m. So going 1% above would not really stop so many of the service reductions. If you want to help mitigate the impact of the reduced funding, the Council would need to look at a larger increase. For arguments sake, a 6% rise would net you £9.086m.
Even if the local authority wanted to raise it above the 2% it would have to convince the public to agree and vote yes. If you held a stand-alone referendum and lost, you would have to find additional savings to cover the cost of the referendum.
I will point out that if you want to stop the full impact of the £196m a few percentages added on is not going to have much impact. You will need to look at percentages above 25%/30%.
However, a stand-alone election might not have to happen, as the referendum could also take place at the same time as the general election. If this referendum took place at the same time as the general election you would still be looking at a running cost of around £700k.
A further difficulty in holding the referendum is this vote would be after Council Tax bills have gone out. So if a referendum was carried, there would be a need to re-sent Council Tax bills with the new Council Tax figure.
The question is, should the Council look into rasing Council Tax about the cap of 2%.
Councillors will hopefully be able to discuss this at full council, but what do the people of Cornwall think? Feel free to send me your views on this? I have added a poll, please give you views there too.