Council tax rise possible
Dec 30 2008 by Adrian Pearson, The Journal
SPENDING chiefs at a new super-council set up to save money are already considering a 5% council tax increase. Staff putting together the budget for Durham County Council's new unitary authority have told councillors that the best way to meet savings targets is to raise local taxes by the maximum amount the Government will allow.
Council bosses have promised ministers they will find £20.53m in savings and run a more efficient authority, but budget preparations so far suggest treasury officers want to offset these cuts with an above-inflation tax hike.
Labour council leader Simon Henig said the 5% figure was just a working estimate for the council’s treasurers and reaffirmed his plan to equalise council tax to the lowest rate in the county.
The cost of setting up the new County Durham super-council is estimated at £12.45m, around half of which will cover redundancy payments. Liberal Democrat opposition leader Nigel Martin said the whole process was rushed and warned the council it faced major challenges.
He said: “I hope they can avoid these large council tax rises but I’m not so sure they will.
“It will be very difficult for the authority to bring about the savings first predicted in the time the Government wants to see them.
“And that is not a criticism of the officers involved, just an honest assessment of how difficult the next year will be.”
Durham finance bosses are also having to look again at the money they thought they would have for everything from transport to regeneration schemes as the credit crunch hits council income.
A reduction in income from planning services and the sale of council assets will see millions of pounds wiped off the council’s budget.
Last night Mr Henig said: “I’m not going to pretend that setting this budget will be easy, there are a lot of complicated factors facing all authorities that will push up costs but we still intend to meet our promise of equalising council tax to the lowest rate in our first year as a unitary authority.
“The 5% figure is just a number for officers to work back from as we move towards proposing a rate in January.
“It could just as easily be a 0% increase which we work upwards from.”
