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.

[poll id=”7″]

 

5 comments

  • Gill Martin

    If the council raise council tax above 2% to protect services, will it not give the government the message that Cornwall can cope with being cash starved and without any decent rural allowance. Will they therefore continue to cut allowances to Cornwall even more drastically, as opposed to being made to face the reality that Cornwall cannot continue to function in the way they largely dictate. Look at the government dictation for the provision of free schools meals, without due consideration to the related expenses.

  • Fred

    Isn’t that double standards you have there Gill, you blame the government but in the past you’ve defended local MP Andrew George. The county council shouldn’t waste money on a referendum because how ever much money they have they still wont manage there budget without making the poorest in society pay council tax.

  • Gill Martin

    Fred, how coincidental, “Bewilderment and chaos” article, Packet website. Comment 110 – “Fred from Helston” (Ron) accusation of “double standards”!

    I have no double standards, my only defence of Andrew George MP has been against unnecessary personal remarks made about him. I also stated it is better to have a vocal MP than an MP one never hears from, I believe the same applies to councillors.

    Whether or not Cornwall Council proceed with a referendum and regardless of whether the council tax remains under 2% or rises above, Cornwall Council will manage their budget in the best possible way. The decision to make everyone regardless of income, contribute to council tax, is already in place. It is therefore a forgone conclusion that everyone will endure a council tax increase of some degree.
    I stand by my opinion, I think Cornwall is underfunded by central government and should receive a rural allowance.

  • Fred

    I’m not the Fred on the packet website. How can you say the county council will manage there budgets in the right way when they’re making the most vunerable in society pay council tax? You’ve got double standards Gill you defend the county council but you obviously wouldn’t high council tax.

  • Gill Martin

    ‘Fred’ I reiterate, I do not have double standards. I believe you are speculating as to how I do and do not think. Youhave nothing with which to substantiate your claim of me having double standards. Nowhere have I stated I would not approve of an increase on council tax whether it is below or above 2%. As democratically elected members, I defend the right of Cornwall Council to manage their budget in the way in which they find appropriate. I personally have faith they will do what is right at the time, with whatever income they have.
    Cornwall Council are not alone in charging those on the lowest income a proportion of council tax, it does not however mean they fail in their ability to manage their budget.

Please feel free to leave a comment to the post, as I like to hear your views! However, comments that do not meet the rules of the site (found in Blog Disclaimer) will not be published. Furthermore, all comment need to be approved by admin before publication.