29th Jun, 2022

BREAKING: Coventry council tax set to rise by 4.9 per cent next year as £19m blackhole looms

Les Reid 20th Nov, 2017 Updated: 20th Nov, 2017

COUNCIL Tax in Coventry is set to rise by another inflation-busting 4.9 per cent next April.

While additional cuts to services are not being planned for next year, the council is forecasting having to make major cuts and savings of £19million by 2020/21.

The figures are produced in Labour council leaders’ Pre-Budget Report released today, for discussion at the council’s cabinet next week.

The 4.9 per cent rise – the same as was implemented for this financial year, 2017/18 – includes 3 per cent to go directly to ‘adult social care’.

The government enables councils to include the 3 per cent for care services for the elderly, mainly at home and in communities. Both councils and the NHS are under increasing strain annually from a rising population, and with people living longer.

No council is able to set a council tax rise of 5 per cent or above without staging a referendum to allow local voters to decide.

Coventry City Council’s pre-budget report forecasts a £3 million budget shortfall next year, particularly because of overspending this year by some council departments.

Council leaders say among the biggest reasons for the failure to balance the books so far are:

* The cost of children is care rising, with 650 youngsters now in costly council care. It is despite years of attempts to reduce these costs.

* The flagging city centre, with many properties lying empty, resulting in less rent for the council.

* The increasing costs to the council of housing homeless people and families in temporary accommodation.

Council leaders say disproportionate government funding cuts to local authorities since 2010 have already removed £107million from Coventry council coffers, rising to £119million by 2019/20 (which includes a £6million cut next year).

In that time, there have been cuts in services for the vulnerable, young and elderly in Coventry – including to libraries, children’s centres, nurseries, youth clubs and transport to school for disabled youngsters.

The council says it has had no choice but to strip services back towards what it is legally required to deliver as a minimum.

Cuts to services previously approved by council will continue, but council leaders forecast no additional service cuts will be required next year.

Some critics may accuse them of kicking the can down the road, given the forecast for an eye-watering budget shortfall of £19million by 2020/1.

Ominously, finance director Barrie Hastie warns in the pre-budget report: “Unless there is a significant shift in national funding arrangements in the council’s favour, financial year 2020/21 threatens to be a very challenging one.”

Much of that dire forecast is due to the government moving towards ending revenue support grant funding in 2020 to local authorities. Councils will instead have to rely more on self-funding through business rates and council tax, hence the council’s drive for inward investment and building more homes for a growing population, including on up to 10 per cent of green belt.

Coventry is already taking part in a pilot whereby it keeps all the money it collects in business rates, rather than sending half of it back to government, as previously.

Councillor John Mutton, finance cabinet member, said: “We are explaining our proposals now so that the local community can tell us what they think.

“The council remains committed to seeking to protect its most vulnerable citizens and providing core services to everyone in the city including bin collections and street cleaning. That’s why I am so pleased that the proposals in this report avoid any new cuts to council services.

“We want to be able to agree a balanced budget by the end of February 2018 and this is likely to include an overall Council Tax increase for 2018/19 of approximately 4.9 per cent including 3 per cent to reflect funding for Adult Social Care as allowed for within government guidelines.

“For a number of years now the government has unfairly penalised local authorities. In response we are changing the way services are delivered and trying to become more self-sufficient by looking at more commercial ways of doing things.”

 

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