Sorry folks, but 2021 looks like council tax rises and service cuts

MAYOR SAYS £20M FROM RESERVES WILL PLUG FUNDS SHORTFALL, BUT MAXIMUM TAX HIKE ALLOWED IS ON THE CARDS FOR LEICESTER

PEOPLE in Leicester have been warned to expect the “worst of both worlds” next year with a council tax hike alongside service cuts.

The city council has produced what it describes as a “stop-gap” budget which it says will avoid the need for crisis cuts for a year, but only by plugging an anticipated gap in its funding with £20.2 million from reserves.

At the same time, the authority plans to increase its share of the precept by the five per cent maximum allowable by the government cap.

That means the bill for a Band D property in the city will increase to £1,694.92 for the year from April 1.

Leicester mayor Sir Peter Soulsby told the Mercury that the coronavirus pandemic has had a huge impact on the income the council generates itself through charges such as parking fees, while its grants from the government have been falling year after year.

Sir Peter, pictured, said: “It has been a very difficult year but we have been able to produce a budget that will get us through the next 12 months. That is only possible because we have been managing our budgets carefully for 10 years, putting money into reserves.

“That means we are not at the crisis point some other authorities are arriving at.

“However, you can only take from reserves once and there is much uncertainty about our resources in the future.

“This year we can manage things but there will be the worst of both worlds – higher council tax bills but still less money to spend on services beyond children’s and adult social care.”

He added: “Our difficulties have been compounded by the coronavirus pandemic.

“We have worked hard to support businesses and vulnerable residents during this time, and do not know how much we will still need to spend. Nor do we know what spending cuts the government will make in future to repay the extra debt it has incurred. When this is all over, I greatly fear a damaging new round of austerity.”

The council says an extra £10 million will need to be found to meet the rising costs of adult social care.

The government is expected to provide an additional £2 million and has allowed councils to increase council tax by up to five per cent, with three per cent ringfenced to help meet the shortfall in the social care budget.

Another £10 million has been set aside for one-off costs associated with the pandemic in 2021/22. This is likely to include income losses which are expected to persist, particularly car parking, sports and De Montfort Hall.

The government will make some grant funding available to local authorities for costs in 2021/22, but at this stage the council says it has no way of knowing whether this will be sufficient.

Sir Peter said: “We obviously want to provide properly for the growing numbers of older people needing social care. The government should be fully funding these costs, not passing the buck to local taxpayers.”

Council director of finance Alison Greenhill said: “The legacy of the pandemic will have a major impact on what the council needs to provide in the future, and how we provide it.

“It is too soon to look at this sensibly while we are still subject to restrictions and uncertainty, and the budget is a temporary measure until we can properly plan for 2022.

“We are fortunate in having savings from earlier years that we can use to balance the budget, and give us time to review what we need to do. My expectation is we will also face a number of years of spending cuts which we will need to plan for.”

The final council tax bills going out next year will also include sums to pay for policing and the fire service.