Political row erupts over suggested council tax increase
PUBLISHED: 15:59 21 October 2020 | UPDATED: 12:24 22 October 2020
A political row ensued after a Liberal Democrat councillor appeared to suggest raising council tax by the “maximum permitted,” before any limit has been set.
The Conservative group on Cambridgeshire County Council picked up on the remark, claiming the Liberal Democrats want to raise council tax “at any level possible,” with one of their councillors calling it “disgusting”.
But the leader of the Liberal Democrat group, Lucy Nethsingha, denied her group wants to put up council tax by the maximum allowed, and said the “implication that we would want to be putting up council tax on anybody this year is entirely unfair and untrue”.
The county council’s general purposes committee discussed on Wednesday (October 20) how to deal with a potential budget gap of £40 million next year, as the financial impact of the pandemic looms.
But there is uncertainty over the scale of the issue, with unknowns including the level of extra government support, the amount that can be raised through council tax, and the future spread of the virus.
The council’s current forecasts for a shortfall next year range from £30 million to £80 million. Before the pandemic hit, the council was forecasting a need to make savings of £4.2 million on a £650 million budget for 2021/22. Between the new wide-ranging forecasts, it says £40 million is the “prudent” assumption for now.
To make up such a shortfall through council tax alone would require a 15 per cent increase. Both the Conservatives and Liberal Democrats have said they would not consider raising council tax by that much, even if it were legally possible. But exactly what level of increase each would consider is unclear, and the two clashed on their differing approaches at the general purposes committee.
The government usually caps the amount authorities can increase council tax by, with a referendum required to breach that limit. Councils with social care responsibilities, such as Cambridgeshire, were given a four per cent cap last year, and the county council rose its share by 3.59 per cent then.
The government has not yet announced what the cap will be for budgets set this February, if there is to be any cap at all.
As part of his questioning of the leader of the Conservatives, Liberal Democrat Sebastian Kindersley said: “Reading between the lines of this [council] report, it would indicate that we would be, at the very least, foolish not to accept a council tax increase of the maximum permitted.”
Leader of the council, Conservative Steve Count, said he “categorically” rejected that view.
Cllr Count said: “If the government says it’s up to local councils to sort themselves out and it would take 15 per cent to actually balance our books next year, I cannot ask the people of Cambridgeshire to put their council tax up 15 per cent.
“I have to look at what else is on our balance sheet, what other measures we could do to avoid that necessity, and give a balanced approach to the people and the economy of Cambridgeshire.
“So categorically no, I will not automatically go to a maximum permitted amount, unless I know what that is, and what other options are in front of me.”
The council’s chief financial officer, Chris Malyon, said: “It is unlikely that the council will be able to set a balanced budget for the financial year 2021/22 without further tax increases, significant service reductions, significant use of reserves, or government intervention. The most likely outcome is of course that there probably will be a mixture of all of those elements.”
He said it was his personal view that it is “just not comprehensible” that the government would not relax the limitations on increasing council tax.
Mr Malyon also said a consequence of using council tax as part of the solution is that the rise would then be “embedded in the council tax in perpetuity”.
“Would you use a long-term intervention to deal with a short-term issue?” he asked.
But he warned: “What is clear from those very early discussions [with government] is there is an expectation that councils will do whatever is in their gift to minimise the need for government support.”
Cllr Nethsingha said it is “utterly indefensible” and “deeply disappointing and deeply unhelpful” that councils “have no clue” at what level they will be able to set council tax next year, when they are already starting work on those budgets and have to have them agreed in February.
She challenged the implication that her group “would like to go to council tax as the first port of call” and said she recognised the “unprecedented” financial pressures residents are under.
She said: “None of us wish to raise council tax any more than is absolutely necessary, but we also have to recognise that there are many many families who are on very low incomes who depend on our services, and very vulnerable people that depend on our services, and if we always choose to cut those services first, we are cutting the services to the most vulnerable.”
Liberal Democrat Lorna Dupre said that based on the current forecast, and without some degree of council tax increase, “many people who have little income and rely on our services are going to find those services cut from under them, or they are going to find themselves having to pay very much increased costs to access those services”.
She said that unless the government covers the entire cost, which she said she does not think is likely, “then it seems to me that relying on the people who depend on our services most to make up that shortfall in extra charges or reduction of service is a terrible thing to do”.
Cllr Count said that in the current worst-case scenario being forecast, a shortfall of £80 million next year, he would not expect the government to “rescue us 100 per cent,” but added that were that to be the reality, then many other councils would be going through similar problems and may even run out of money. “It’s impossible to envision that sort of impact without additional support,” he said.
Cllr Joshua Schumann said there was a “lack of consistency” from the Liberal Democrats. “We started with the comment that we should be increasing council tax by the highest amount possible, and that was backtracked quite quickly,” he said.
He urged the Liberal Democrats to come forward with suggestions “about how savings may be achieved, about how this council can be run efficiently, rather than just sit there and suggest that council tax is the panacea to all of our problems”.
He said there are challenges associated with raising council tax “at a time when people are losing their jobs, struggling to pay their bills, are fearful for the security of their home, and suddenly the answer from the Liberal Democrats is, ‘you know what these people really need is an increase in council tax at any level possible’. I think it’s quite frankly disgusting.”
He said the Liberal Democrats had suggested there is “some kind of exclusive divide” between those that use council services and those that pay council tax, which he said was incorrect and “also disgusting”.
Cllr Kindersley objected to the use of the word “disgusting” and said political differences should be treated with “respect”.
The leader of the Labour group, Elisa Meschini, said council tax “has to be part of the discussion” and noted the Conservative group has raised council tax in the past.
Cllr Nethsingha said after the meeting that at no point has her group said it would put up council tax by the maximum allowed this year, saying they do not even know what the maximum will be.
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