£30 council tax hike proposed by Derbyshire
DERBYSHIRE County Council, which makes up the vast majority of your annual council tax bill, is looking to increase its precept by 2.5 per cent – half the maximum that central Government has allowed.
One per cent will be for adult social care, out of the three per cent on offer from Government. The council aims to use the remaining two per cent hike in 2022.
For Band D homeowners, this year’s hike is an increase of £33.73 a year to £1,383.07. For Band A homeowners, this is an increase of £22.49 to £922.05.
Other authorities also have their own precepts, which make up your tax bill.
In the county area, excluding Derby, this includes the fire and police services, your local district or borough council, and in some areas a town or parish council.
The district and borough councils and police service have not yet put forward their council tax proposals for the financial year 2021 to 2022.
Derbyshire Fire and Rescue Service is planning a 1.98 per cent increase of its precept, which for Band D homeowners is £1.54 extra to £79.27.
Peter Handford, Derbyshire County Council’s head of finance, sharing the council tax proposals ahead of a cabinet meeting tomorrow, said the authority’s precept is the lowest out of the 14 other shire counties.
He shared a grim overview of the financial risks ahead for the county council and a potential look into decisions which could cost residents dearly and see services cut drastically.
Mr Handford said the council must make £72.6 million in cuts by the financial year 2025 to 2026, of which the authority has identified £38 million (around half, down from 80 per cent last year). This £72.6 million is on top of £300 million cuts since 2010. Its budget for 2021 is £571.7 million.
He said the authority is faced with “difficult decisions” in the next few years and suggests continual low council tax increases could hurt it down the road – leading to a total freeze on all but essential finances in the worst case.
He pointed the finger at a failure from central Government to provide sufficient funding for children’s and adults social care, adding there is “no intention” to serve this freeze on the council’s finances – a Section 114 notice – however, it remains a “going concern.”
He said: “It will require difficult decisions to be made and strong, robust financial management. Experience and investigations into those councils experiencing financial failure demonstrates that periods of lower than allowed council tax rises can exacerbate other financial issues.
“Setting a low council tax will mean that there will be some difficult choices in 2021-22. The achievement of savings is critical in ensuring the council balances its budget.
“The pandemic has slowed down the council’s savings programme and departments will be playing ‘catch-up.’”
He said “there is a continued risk of not achieving a balanced budget” and the authority should plan to not rely on using its general reserves (rainy day fund) to cover overspending and savings shortfalls.
He warns the council’s general reserve could fall to £5 million over the next few years. A pessimistic estimate would be that it falls to £24.5m by the end of the coming financial year, starting in May, and to £9.6m by 2025-26.
He said children’s services budget issues were being pushed by rising numbers of looked-after children – assisted by the authority through adoption and foster care and under child protection plans.
County council leader Barry Lewis said: “We are facing budget pressures like never before. We have welcomed significant extra Government funding for social care and to help meet Covid costs in the past year and the council remains in a stable position financially.
“However, adult and children’s social care budgets will continue to fall short in future years due to demand and increased costs.”
“We realise that many households are facing extra pressure themselves due to the pandemic and we do not want to add any extra financial burden to residents, which is why we’ve worked hard to propose the lowest council tax increase that we can.”