Council Tax: West Suffolk's fears

By Graham Dines, Patrick Lowman and Alison WithersHOUSEHOLDERS across Suffolk are bracing themselves for more bad news this week when Deputy Prime Minister John Prescott announces his funding for local authorities.

By Graham Dines, Patrick Lowman 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 than inflation.

The Deputy Prime Minister has warned councils he will not hesitate to cap their spending if it 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.

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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."

Gerry Kiernan, policy development chairman at St Edmundsbury Borough Council, feared the Government grant would need to be above inflation to prevent more hikes in Council Tax and service cutbacks.

"We need a good settlement because the cost of running a local government is very high at the moment. Services, such as care for the elderly and education, are so expensive and consume a great deal of the authority's money," he added.

"People do not want to see more Council Tax rises or a cuts in services, but I think the amount we get needs to be above inflation or these things could happen.

"We have introduced schemes to try to increase our revenue, such as increasing car parking charges and charging for collecting household waste, but we may have to look at other services that can be cut if we don't get an adequate amount from the Government."

Forest Heath District Council was given a 1.6% increase in the get a significantly-improved sum this time around.

Stephen Edwards, chairman of its finance committee, said: "We need to get an increase to at least match inflation, which we didn't get last year. We are hoping for an increase of between 2.5% and 3%, which will go a long way to help meet the amount we need.

"It is impossible at this stage to predict with any accuracy what effect this could have on Council Tax payments. We will look at our budget early in December and, depending on the grant we get, we will look at areas where savings can be made.

"We have a good level of service at the moment and the last thing we want to do is make cutbacks. We want to stabilise and maintain the services we have got, but we must get a decent amount from the Government to do that."

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."

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.

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."

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