Below-inflation Tax Increase Proposed

Below-Inflation Council Tax Increase Proposed

11/02/2013 Reading Borough Council Press Release

A recommendation to increase Council Tax, the first rise for three years, will be considered by Reading Borough Council’s Cabinet on Monday (18 February, 2013). A below-inflation 1.9% increase – the equivalent to 47p a week for Band D Council Tax Payers - is proposed to help to bridge the gap in funding as a result of another cut in Government grant, following the Local Government Finance Settlement, announced in December. This has resulted in the Council having to find savings of £13.4m in the next financial year, on top of about £30m of savings over the past two years. Further savings of around £15.5m a year will have to be found in the financial years 14/15 and 15/15.

The Government has offered the Council a grant of £700,000 – equivalent to a 1% increase - to freeze council tax for a third year. However, with RPI inflation running at 3.1 % (Jan 13), and despite achieving major savings across the Council, accepting the freeze grant would mean having to find further savings of £0.5m. A small increase of 1.9% will deliver £1.2m which is considered essential to ensure the Council can continue to meet its dual aims of protecting front-line services such as adult and children’s social care, transport, culture and leisure, and emptying the bins, and supporting the most vulnerable people in the borough.

Commenting on the proposed council tax increase, Council Leader, Cllr Jo Lovelock said: “Making this proposal has been a very difficult decision. As an administration we have promised to keep council tax as low as possible, consistent with maintaining essential services and exercising financial prudence and value for money. This proposal meets that undertaking. “The Council has worked hard to identify new, more efficient ways of working, and to reduce support costs, but in view of the further cuts to Government grant funding, we are faced with no alternative but to put forward a council tax increase for next year. “Whilst we were prepared to accept the Government’s Council Tax freeze grant last year, recognising that in tough financial circumstances we needed to do everything possible to reduce the burden on hard-pressed local people, we have reached the stage where the level of freeze grant being offered is simply not enough – even with the significant savings we have identified for the next financial year – to allow us to maintain vital front-line services and protect the most vulnerable people in our society.”

If agreed at Cabinet, the proposal will go forward for ratification to a meeting of the Full Council on Tuesday, 26 February.