Frontline service cuts risk warns Colchester council leader as council tax set to rise
- Credit: Archant
Frontline services in Colchester could be at risk from 2019 a council leader has warned as the authority considers putting up council tax next year.
Colchester Borough Council is currently working on its budget for 2018/19, and is working on the basis of a £5 council tax rise at Band D – equivalent to a 2.8% increase on its precept, and a move which will generate £225,000 for the council.
This follows a similar rise this year, which came after seven years of council tax freeze.
But while council leader Paul Smith is confident the £600,000 gap in the borough’s finances for 2018/19 can be achieved through increased business income and efficiency savings, he has warned of challenging times ahead.
Mr Smith said that from 2019/20 it is estimated the authority will not only no longer receive any central government funding, but faces paying out £400,000 in a “negative” grant funding settlement.
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He said: “The real issue is the very substantial reduction in the government funding we are getting.
“We are losing a huge chunk of the New Homes Bonus and taking a big hit in the Revenue Support Grant, totalling £2million. So we have to do as the government suggests and increase council tax by the amount it recommends.
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“It is something we very much regret doing and we would love to continue to freeze council tax but it’s just not possible.”
The leader pointed to increased income for the council, such as the rental and business rates from the Amphora Place office block it built on the Sheepen Road car park, as just one way of tackling the funding gap, as well as a senior management restructure which would save £400,000 without affecting frontline services.
“This year I think they will be enough. Next year will be very challenging when we will have to pay £400,000 to the government – we can’t absorb £2m in cuts just through efficiencies alone. At its peak we received £12m from government, through to us paying them, that’s an absolutely huge swing.
“At some point there’s a risk to frontline services, which we have been able to avoid so far.
“The future is very questionable.”
The council’s cabinet is due to discuss an early report on the budget at its meeting on Wednesday, October 11. Final budget proposals are usually published in January for council approval in February.
As it is so early in the process details are scant, but there is a proposal to spend £200,000 of the New Homes Bonus – one-off funding – to improve facilities at Castle Park, such as the toilets, as well as spending £25,000 at High Woods Country Park to create catering facilities.
Mr Smith said such funding could not be used for ongoing costs, but its aim was to create new sources of income for the council and generally grow the local economy.