Council Tax: Essex councils' fears

By Ted JeoryGOVERNMENT capping powers may be used in Essex for the first time after a survey showed Council Taxes in the county could rise by up to 30% next year.

By Ted Jeory

GOVERNMENT capping powers may be used in Essex for the first time after a survey showed Council Taxes in the county could rise by up to 30% next year.

An analysis by the East Anglian Daily Times revealed real fears Government grants could fall far short of what councils need, meaning vital services could be cut.

Last night, Lord Hanningfield, leader of Essex County Council, said he was prepared to take the Blair administration to court if necessary over its funding of the authority.

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The Government is due to announce on Wednesday its Revenue Support Grants – its funding for councils and police authorities – for the next financial year, which will directly affect the final Council Tax bills.

For if these grants fall below what councils need, they will have one of two choices – put up the Council Tax to plough ahead with their spending plans, or simply cut services.

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Tendring District Council needs £7.8m from the Government just to keep its overall budget standing still in real terms.

That is 25% more than it actually received this time last year, leaving councillors no choice but to consider the effects of a 30% Council Tax rise.

Bill Bleakley, its finance portfolio holder, warned leisure services were under threat.

"We have already cut our services down to the bone and as we are required to spend just to meet statutory obligations, such as recycling, taxes will rise," he said.

"Our overview and scrutiny committee is currently looking at three different scenarios if the Government comes in short – a rise in tax of 10%, 20% and 30%.

"All three are real possibilities. If we are capped because of this, then whole services will have to go and leisure services is one of the main discretionary areas where we can do this."

Colchester Borough Council needs £12.4m for a stand-still budget – £1.3m and 11.7% more than last year.

Its cabinet is looking at a Council Tax increase of 7.8% next year, which makes Government capping unlikely.

However, if the grant falls short of expectations, cuts will be necessary, according to the leader of the Conservatives on the coalition council, John Jowers.

"There will be areas that will go – we won't be able to avoid that if they don't give us the money," he said. We can also raise fees at places like Leisure World, but we need to remain competitive there too.

"What people have to realise that councillors have to pay this terrible tax too – when we put it up, it's like turkeys voting for Christmas."

Essex County Council has estimated it needs a grant of £438.7m – 7% more than last year – to meet its requirements, but its Conservative leader, Lord Hanningfield, doubted it would even get that.

"Last year we only received an increase of 3.5%, which was the lowest in the country, so I expect the same this year on past performance," he said.

"I want more than anything to keep the Council Tax increase under 10% and we will do everything we can to prevent it going higher. If the Government comes in and tries to cap us, then they better be prepared for a fight in the courts.

"Essex is on the end of terrible treatment. There's a limit to what we can cut – we can't just close old people's homes and libraries overnight."

Robert Chambers, chairman of Essex Police Authority, said it required a grant increase of 4.5% simply for its budget to stand still in real terms. This translates into Government funding to the tune of £162m, up £7m on last year.

He said: "There is no way that we will see double-digit Council Tax precepts coming out of this authority – we have placed a ceiling of 7%.

"If we don't get what we need from Government, we will find what we need extra from our own resources rather than cut or raise tax higher than 7%.

"The increase in funding will be used to pay for more high-visibility policing with some 90 extra community police officers set to go on the beat."

Maldon District Council needs a grant of £4.5m just to keep its Council Tax rise at the rate of inflation.

However, that is almost 25% more than last year's grant and council officers did not expect anything like that this time round.

A double-digit rise in Council Tax seems inevitable because there is little scope for cost-cutting and the council's finance manager, Jon Cooke, felt capping would be "most unreasonable".

Chelmsford Borough Council needs a grant of £9.2m to stand still in budgetary terms – 3% more than last year.

John Galley, finance portfolio holder on the council's executive, said he did not think it would be affected by capping because it had already identified savings to keep the Council Tax increase down as much as possible.

David Finch, leader of Braintree District Council, said a grant of £9.9m was needed to keep the budget level – 11.4% more than last year – but he insisted residents would not see a double-digit Council Tax rise as a result.

Uttlesford District Council leader, Alan Dean, said he would "blow his top" if he forced into a capping scenario by the Government.

He added the authority was looking at a Council Tax precept of between 5% and 10% after finance managers budgeted for a 0% increase in its £1.3m grant.

"We had the lowest Council Tax in the whole of Essex last year and, with all the problems we face over Stansted and housing in the M11 corridor, I'd be extremely disappointed if we had our grant slashed," said Mr Dean.

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