Stark choice in Essex

COUNCIL bosses are facing up to the stark choice of hiking taxes or cutting public services.The grim prospect came after local authorities across the region were deeply disappointed by the Government's announcement yesterday of how much money they will get from Whitehall next year.

COUNCIL bosses are facing up to the stark choice of hiking taxes or cutting public services.

The grim prospect came after local authorities across the region were deeply disappointed by the Government's announcement yesterday of how much money they will get from Whitehall next year.

It left many councils facing a struggle to maintain jobs and services after receiving a below-inflation rise in their Government grants.

The problem facing county, borough and district councils is the increase in the cost of the goods and services they buy is way above the headline figure of inflation.


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From paper clips and accommodation costs for the elderly to the bitumen needed to mend roads and employee National Insurance costs, local authorities pay more each year than inflation.

Whitehall grants account for about two-thirds of council spending, with the remainder made up from Council Tax.

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The less the Government gives, the more householders have to pay – although next year, councils are likely to be capped, leading to cuts in services.

The Council Tax bill that lands on people's doormats is made up of charges levied by parish or town, borough or district and county councils, as well as the police and fire authorities.

But how much householders will pay in the financial year 2004/5 will not be known until about February after all the various budgets have been completed.

In Essex, the county council portion of the bills is by far the largest and it had been hoping for a Government grant increase of about 7%.

But the Government said it would be giving Essex County Council – which has been considering cuts in services – £781.6million, 5.5% more than the current financial year.

Council leader, Lord Hanningfield, said: "This was more than we thought we'd get, but we're not pleased about it.

"We have to go through all the numbers and see how much of the grant is ring-fenced for things like education.

"It's better than we got last year, but I don't want to build up people's hopes until we've done a full analysis."

Tendring District Council will get £9.7m, a rise of about 2.6%, but well below what it needed to avoid huge tax rises.

It meant Council Tax bills in Tendring could rise by at least 30%, leaving the council facing the real possibility of being the first local authority in the county to be capped.

Council leader, Terry Allen, said: "This is bad news for the people of Tendring. We've already been looking at different scenarios for tax rises and this only means we're looking at the top end of 30% now.

"If these rises go ahead, it could be just the first of two years like this. We have a statutory obligation to provide services, so if we have to cut, it will be things like leisure and economic regeneration.

"We did not keep taxes down for last year just because it was election year – we've been foreseeing this for some time."

Colchester Borough Council bosses said it appeared the authority will be given an extra £218,000, an increase of 2.2%.

Council leader, Colin Sykes, added: "It's more than we were expecting, but still well below inflation.

"Also we do not know whether we are going to get back all the cash that they have taken away from us for benefits funding.

"However, we have been making savings for a rainy day like this one, but we there's a limit to how much fat we can cut out.

"The Council Tax rise that we've been looking at is 7.8% and we just hope we can at least keep to that."

David Finch, leader of Braintree District Council, which will get £7.7m, said: "I would rather see the final numbers, including the new benefits funding arrangements, before making a detailed comment."

Maldon District Council will receive £3m – 2.4% more than last year – and council leader, Bob Boyce, said: "We are disappointed with the provisional settlement.

"We were expecting an above-inflation increase, with the extra money used to keep taxes down or provide more services."

John Dickson, director of resources for Uttlesford District Council, which will get £3.4m, said he was frustrated by the funding announcement.

"I had hoped to be sitting down and planning the next financial year. Instead, I'm now left wondering what the financial future of the district will be," he added.

Chelmsford Borough Council will get £8.2m. John Galley, the finance portfolio holder on its executive, was not available for comment last night.

ted.jeory@eadt.co.uk

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