Wednesday, 16 January 2013

Residents to be spared from the predicted rise in Council Tax

Thanet District Council is set to peg its Council Tax at the same level for a fourth consecutive year.  This is despite suffering a further 7.4 per cent reduction in its annual formula grant from central government for 2013/14.

The latest government cut means that the formula grant will have fallen from £13.3m three years ago to just £8.5m from April this year.  However, recently published official figures reveal that the grant will be reduced again for 2014/15 - to £7.1m - an overall drop of 47 per cent.

In spite of this, the council’s cabinet has put together a budget which will enable it to withdraw its earlier recommendation for a 2 per cent increase in Council Tax. This would have been equivalent to £4.20 extra per year for a Band D household.

Cabinet will make its formal recommendation when it meets on 22 January, with the final decision being taken by the full council on 7 February.

Cllr Rick Everitt, Cabinet Member for Finance, said: “When we considered the draft budget last November we needed to find almost £800,000 to balance the books for next year, and at that stage an increase in Council Tax looked unavoidable.

”We had also pencilled in a £580,000 contribution from the council’s New Homes Bonus reserve, although if possible we would have preferred to spend that money on one-off initiatives to improve Thanet for the benefit of residents and visitors.

“This was the prudent position for us to take, based on the information to hand at the time. However, given the continuing pressure on household finances we were very clear that we would continue to search for other ways to close the gap, including identifying additional back-office savings and finding other sources of funding. We have now been able to do this.

“Following this work and the 19 December announcement of the local government settlement, I am delighted to announce that we have fully closed the gap for this year. The settlement is slightly better for 2013/14 than anticipated but is, unfortunately, much worse for 2014/15.

“Cabinet is now able to recommend to council that there should be no Council Tax increase and no additional draw-down of the New Homes Bonus to fund our existing services in 2013/14.

“That’s the good news. However, the council’s financial position remains extremely tight. Our officers are fully stretched by their current workload and there is no escaping that there will still be some very difficult choices to be made in the years ahead.”

The council’s budget plan shows a net spend on services of £19.37m next year (this is after taking account of the income expected from fees, charges and miscellaneous grants), down from £20.38m in 2012/13, despite the effects of inflation and other cost pressures.


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