Council Tax: East Suffolk's fears

By Graham Dines, Rebecca Sheppard, Sarah Chambers, David Lennard and Alison Withers

HOUSEHOLDERS across Suffolk are bracing themselves for more bad news this week when Deputy Prime Minister John Prescott announces his funding for local authorities.

Although Suffolk County Council – which this year hiked Council Tax bills by 18.5% – insists it is doing all it can to limit the rise to about 9%, that is still almost four times the rate of inflation.

The authority's efforts to make efficiency savings, combined with a standstill budget for all spending departments except schools, may not be enough to prevent another double-figure increase if Mr Prescott decides councils will have to make do with little more than inflation.

The Deputy Prime Minister has warned councils he will not hesitate to cap their spending if the Government thinks they are making excessive demands on Council Tax payers.

But he has refused to rule out again giving councils in the North and Midlands disproportionately more in funding, forcing up bills for householders in the South.

With ministers already signalling teachers will have to make do with a 2.5% rise, councils are becoming increasingly concerned that is all they will be given.

Suffolk County Council received £371million from the Government last year, but refused to give a figure for the increase in the Revenue Support Grant – the funding it receives from Whitehall – to maintain services at the current level in the next financial year.

David Rowe, the councillor responsible for finance, said its planning arrangements were "more comprehensive than simply looking at a standstill position."

He added: "We will be looking to limit any growth to keep any Council Tax rise as low as we can, but some growth may occur due to us being required to undertake new functions.

"Areas which contribute less to our priorities will be considered for cuts. However we are keen to try to do things differently without cutting services, for example by increasing efficiency and procurement – bulk buying – and streamlining our contracts to get a better deal."

Mid Suffolk District Council received £5,211,772 from the Government last year and Chris Lawrence, the councillor responsible for finance and resources, said it would be "pleased" with a settlement of an extra 11% for the next financial year, about £600,000.

But he added the council expected a Revenue Support Grant of only 5%, which would leave it trying to find an extra £1.2m.

Roger Saunders, the leader of the council, said it would not be preparing for a Council Tax rise into double figures this year, unless the funding from the Government was completely away from their target, as "there would be civil disobedience".

He added: "We are not looking for growth. All we can do is what we can afford to do, not what we would like to. Growth is simply not an option."

The council would make "savings and service reductions and not necessarily cuts in services" if the grant was not enough.

These would include increasing parking charges, not filling leisure centre vacancies and reducing corporate grants for businesses.

Suffolk Coastal District Council said it would need an additional £1.3m, or 10.3%, just to stand still next year, but stressed its "firm policy" was to keep the Council Tax to a minimum.

This year bills rose by 7.7%, despite the Government only increasing the council's grant by £9,000, or 0.1% of its budget, to £7.421m.

Ray Herring, leader of the council, said: "We are hoping that we will this year get a fair deal for the people of Suffolk Coastal, but the signs are not good."

The council has already launched Moving Forward Together initiative, an in-depth review of the way it manages and provides its services.

That has identified some savings and the authority will be looking at "further options" for efficiency savings over the next few months.

It is also discussing the transfer of the day-to-day operation of its indoor leisure services to a company or setting up its own leisure trust, while the first increase in car park charges for many years is also being investigated.

Waveney District Council is already committed to "unavoidable increases" of £1.319m to pay for such things as increased salaries and pension contributions for its employees.

To restrict its Council Tax increase to 5%, the authority needs to make savings of £801,000, while savings of £569,000 will have to be found to peg the increase to 10%.

Peter Austin, leader of the council, said: "We will be looking to provide a sustainable budget, but are committed to not cutting frontline services. Obviously, we are having to look at some secondary services to see what savings can be made."

"We cannot, for example, cut back on measures taken to keep the area looking smart and tidy as residents will rightly be upset and it would also have an impact on attracting tourists that is so important to the district's economy."

The council is looking at a number of different areas where savings can be made, including disposing of the council-owned caravan parks in Southwold and Lowestoft on long leases to a private company and increasing car park, swimming pool and sports centre charges.

John Grand, treasurer of Suffolk Police Authority, said it needed a budget increase of 7% to retain the current state of the service.

He added the expected 2.5% increase in Government funding would leave the authority about £4m short and warned the percentage increase in its Council Tax bills "looks likely to be in double figures at the moment".

If the grant was not sufficient, Mr Grand said: "We would have to look at the extent to which we can cover extra costs by reducing other costs.

"We would have to think about cutting back the service or increasing the Council Tax, but there are always options to improve efficiencies first."

Babergh District Council has pledged it will do its best to ensure this year's Council Tax rise will not exceed the level of inflation.

But said a spokesman said the council would need to raise an additional £650,000 (7.8%) to cover inflation, legislative and other commitments and a reduction in the use of reserves.

A steering group of councillors has been going through every service with a fine toothcomb looking for ways to minimise cost and generate extra revenue – such as introducing charges at its free car parks or reducing the Council Tax discount on second homes from 50% to 10%.

Sue Carpendale, chairman of its strategy committee, said: "There is broad concensus across council that we must do our utmost to contain Council Tax rises. This will be an immense challenge since there are huge pressures already within the system, just to stand still on service levels."

John Le Grys, councillor responsible for finance at Ipswich Borough Council, said it needed another £750,000 to keep its services as they are now.

He added that would equate to a Council Tax rise of 11%, but stressed the authority was "endeavouring" to minimise that to 4%.

"The council is only looking for growth to cover its statutory responsibilities around housing and the way rent rebates and housing grants are distributed," said Mr Le Grys.

He added there were "no plans for services cuts", but warned: "If the Government settlement is as bad as some and leaves us in a mess, we will deal with it. We will probably have to look at reducing some levels of service and have to increase Council Tax more."

The council has already introduced a system of leisure centre charges based on people's abilities to pay and is also planning to put up parking charges in October and increase the capacity of the car parks in the town to generate income.