Monday 5 December 2022
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Nottingham

Autumn Statement: Councils can raise council tax by 5% without referendum

Nottinghamshire taxpayers could face added financial pressure next year after the Government gave all local councils the power to further raise council tax.

Chancellor Jeremy Hunt has increased the threshold for which local authorities can raise their council tax bills without holding a public referendum.

The announcement was made as part of Mr Hunt’s autumn statement, aimed at putting the economy back on track while addressing the cost of living crisis.

The council tax ceiling will rise from two per cent for standard services and one per cent for the ringfenced adult social care precept to three and two respectively.

It means as much as a five per cent hike on bills from April 2023, compared with three per cent overall in 2022/23.

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This could lead to a £114.66 rise for a tax ‘Band D’ home in Nottingham if the city council opts to take the full amount.

For Nottinghamshire County Council, the same rise would see Band D bills increase by £82.20 overall for its portion of the bill.

District and borough councils would also have the power to raise their bills by three per cent.

For areas such as Broxtowe, this would equate to a rise of £5.30 per year on Band D being paid to the borough council.

The Police and Crime Commissioner and the Nottinghamshire Fire Authority will also have the ability to increase bills, as well as parish and town councils.

But Nottinghamshire County Council’s portfolio holder for finance says the council wants to keep residents’ bills at an “affordable level”.

Councillor Richard Jackson (Con) said during Thursday’s council cabinet meeting: “It’s going to be about balancing the budget while maintaining services and also keeping council tax, as far as possible, down to an affordable level.

“We’re mindful of pressures on household budgets right across Nottinghamshire.”

But Nottinghamshire Labour has described the Chancellor’s announcement as a “bombshell” and says forcing residents to foot the bill is “unforgivable”.

It’s comes as councils report millions of pounds in missing cash fuelled by the ongoing financial crisis.

Nottingham City Council says inflation has added at least £15m to its planning.

District and borough councils are also reporting millions of pounds in shortfalls next April, with some higher than £3m.

The county council’s cabinet meeting, which began shortly before Mr Hunt’s speech on Thursday, also heard the council’s 2023/24 gap is now £34.8m.

This had risen from a previously-reported £24m figure confirmed by the council last month, with £73.8m needed in total over the next three years.

However, the authority is only forecasting to be about one per cent overspent on its current year budget, Thursday’s cabinet meeting heard.

Councillor Jackson says inflationary pressures include rising costs for care and children’s services and increasing staff wages.

Other cabinet members also warned the coming financial year will be a “really challenging time” for both residents and the council.

The authority plans to ‘transform’ services without making cutbacks and will be trying to find ways to reduce demand through a “preventative” approach.

Cllr Bruce Laughton (Con), deputy leader of the council, added: “When there isn’t more money you have to cut your cloth accordingly.

“This is why the service transformation is about managing demand, we’ve got to manage this to be able to deal with the budget at this point in time.

“We’ve reached the end of salami slicing where we’ve got to actually work out where and how to reduce the overall spend.”

Councils did not receive long-term clarity over proposed grant support from Whitehall when Mr Hunt took to the Dispatch Box.

This is expected to be confirmed by Christmas and will help finance departments with medium-term planning.

But Labour has warned of the impact Mr Hunt’s autumn statement could have on finances both at County Hall and for residents in the county.

Cllr Mike Pringle is the deputy leader of the Labour Group at County Hall.

He said: “Whether it’s putting black holes in the public finances or leaving hundreds of unfilled potholes across Nottinghamshire’s roads, when the Conservatives are in charge … our vital public services are in unsafe hands.

“This Conservative Government crashed the economy in September with a reckless unfunded mini-budget. The Bank of England confirmed this added a huge £19.3bn to the public debt.

“To ask hard-working families in Nottinghamshire to pay the price of Conservative incompetence with a council tax bombshell in the middle of a cost of living crisis is unforgivable.”

•  Chancellor’s Autumn Statement: All the details announced today

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