Fenland Council finance chief believes there's never been a better time to get a three per cent council tax rise in place - and he explains why
PUBLISHED: 16:19 21 January 2019 | UPDATED: 16:19 21 January 2019
There’s never been a better time for Fenland Council to increase its council tax by three per cent, says a report prepared by its senior officers.
First produced in December and sent last week to the overview and scrutiny committee the report details how the Government’s decision to lift the two per cent ceiling has paved the way for an extra one per cent.
Interim chief finance officer Kamal Mehta said that if the council wished to take the benefit of the full increase of three per cent (£7.74 per annum for a Band D property) in council tax without triggering a referendum then 2019/20 would be the year to do it.
“The reason is simple in that with the increase in the county council’s and the police and crime commissioner’s increase, Fenland Council’s increase at three per cent would be a small element of the overall increase,” he said.
“2019/20 provides the opportunity to increase the council’s overall financial base for the future.”
Mr Mehta said they should remember that the Government “effectively loosened the rules on increases in council tax to relieve the pressure on district council budgets”.
Although that view has passed through cabinet without comment, it is likely that when councillors in the ruling Conservative group get together ahead of budget setting they will scupper the idea.
Indeed some are arguing that with an election due in May – and internal rivalries expected to culminate in a leadership struggle once the votes are in - a council tax freeze might be politically expedient.
Officers will press hard for that not to be the case and they argue that a council tax freeze could damage financial stability and make it harder in future to raise the revenues needed to maintain services.
Councillors are poring over the amount central Government will make available to Fenland through direct grants or through the emerging business rates retention scheme and the new homes bonus.
The council believes it is on track with its spending review that has, for example, seen leisure centre management hived off, the community house at Wisbech closed, and the CCTV system merged with that of Peterborough.
Relocating the one-stop shops in March and Wisbech is also around the corner.
Officers are warning councillors that although a 1.9 per cent could work, the future finances of the council would be enhanced through adding an extra one per cent this year to meet estimated shortfalls in future years.
Any rise less than 1.9 per cent, councillors were warned, could end up with the council “reducing its financial base permanently as it would not be able to recover potential revenue forecasts due to the cumulative year on year impact”.