Council tax rise on cards as Colchester Borough Council plans to spend £2.9m buying houses for homeless

Man homeless abandoned in the street. Picture: GETTY IMAGES/ISTOCKPHOTO

Man homeless abandoned in the street. Picture: GETTY IMAGES/ISTOCKPHOTO - Credit: Getty Images/iStockphoto

Sixteen homes are to be bought by Colchester Borough Council at an estimated cost of £2.9million in a bid to tackle homelessness – as council tax in the borough is set to rise.

Colchester Town Hall is proposing a rise in council tax. Picture: SU ANDERSON

Colchester Town Hall is proposing a rise in council tax. Picture: SU ANDERSON - Credit: Su Anderson

Under its budget proposals the precept will rise by 2.75% – £4.95 for a Band D home – as the authority tackles a reduction in government funding of more than £2m.

It is the second council tax rise in Colchester since 2010, and will raise £307,000 for the authority, which is losing £645,000 in government grant and £1.34m in New Homes Bonus.

The council says it is also facing increasing cost pressures, such as from inflation, pension and employment costs.

Spending plans include £750,000 for the Northern Gateway sports project, £250,000 for the Revolving Investment Fund which runs projects designed to increase council income, and £147,000 on housing projects.

The authority also plans to spend £2.9m – of which £1m would come from the Affordable Homes element of the New Homes Bonus – buying 16 two and three-bedroom properties to be used to house those temporarily homeless in the borough, and reducing the expense of costly bed and breakfast placements.

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A separate cabinet report outlines how although there has been increasing success in preventing people from becoming homeless in the first place, the numbers of homeless continues to rise, from 498 in 2014/15 to 648 last year, and 614 for 2017/18 up to the end of December. The extra homes would reduce the cost of homelessness to the council.

Other initiatives include £250,000 for a two-year pilot scheme to increase the supply of private sector housing for the homeless, and continuing to buy back former Right to Buy homes where offered.

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Paul Smith, council leader, said: “There is no doubt the council is facing some very difficult and serious financial pressures, as a result of the government reducing our funding.

“In fact, the cuts we face go well beyond the next financial year, which is why we are having to look at every option available to save money, generate income and continue to deliver on our promise to protect vital services, increase investment and create more growth.

“Unfortunately this means that, for only the second time in eight years, we have had to increase our part of the council tax by 2.75%.”

The budget will be discussed and voted upon by cabinet on January 31, before full council votes on it on February 21.

Elsewhere in Essex the county council is proposing an almost 5% rise (£58 for Band D), while Tendring District Council has proposed a £5 rise for Band D homes. The fire precept will rise 1.95% (£1.35 Band D), while police will go up 7.62% (£12 Band D).

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