COUNCIL TAX ‘MAY HAVE TO RISE BY 6.3%’

... unless AMS agree to give council more cash

COUNCIL tax could go up by around 6% in Swansea unless more money is provided by the Welsh Government.

COUNCIL tax could go up by around 6% in Swansea unless more money is provided by the Welsh Government.

This would take the average band D householder’s bill from £1,518 this year to £1,609 in 2019/20.

Swansea’s chief finance officer Ben Smith told a scrutiny group that the Welsh Government’s draft settlement for local authorities next financial year assumed a Wales-wide 6.3% council tax hike.

“That’s the highest figure I have seen as an assumption by ministers,” he said.

“I don’t recall it being above 5% in the past – ministers would consider that excessive.”

The situation may change between now and next month, when AMS agree a final budget which could potentially direct more money to councils.

Each authority sets its own level of council tax, which includes a police precept, every year.

Mr Smith said Swansea was not obliged to follow the Welsh Government’s current 6.3% assumption but described it as “a useful reference guide”.

Council tax only accounts for around a quarter of an authority’s income but it has been rising steadily – a decade ago a Swansea band D householder paid £1,027.

Some authorities have begun proposing council tax increases for 2019/20 – Conwy Council is proposing an 11% council tax rise, Anglesey Council is proposing a 10% increase and Cardiff Council, which has a better settlement than other councils as things stand, has suggested a 4.3% rise.

Swansea is in line to receive an increase of just £18,000 in its Welsh Government settlement, but faces a funding shortfall of £20 million-plus shortfall due to demographic pressures and unfunded public sector pay rises, among other things.

The scrutiny group also heard that the council’s borrowing may be £200 million in the next couple of years – mainly to finance city centre regeneration projects – which could add around £14 million to the current annual repayment costs of £32 million.

“That is a policy decision for cabinet and the council in due course,” said Mr Smith.

Speaking after the meeting, council leader Rob Stewart said the £200 million figure included existing borrowing.

He said no decisions had been made as yet as to whether this £200 million “envelope” would be reached, and that Swansea’s current borrowing was lower than equivalent-sized cities.

He said the £200 million figure included a planned £45 million expenditure on school upgrades and new school buildings.

The council is leading on a huge scheme to regenerate land either side of Oystermouth Road with a new arena, shops, multi-storey car parks, hotel, park and flats.

The first phase of this Swansea Central project has planning permission and is expected to cost around £124 million to deliver.

Mr Stewart said the council was expecting to provide “tens of millions (of pounds)” towards this project, with other money coming from the city deal for the region, the private sector, and other grants. Precise details are yet to be confirmed.

The Labour leader said the arena, car parks and other buildings would create income streams for the council, offsetting and then outstripping borrowing costs.

“We will borrow against the assets we are creating,” he said.

Mr Stewart added that borrowing money these days was considerably cheaper than in the past.

“And we have paid back a lot of the higher (interest) rate debt which we inherited,” he said.

We will borrow against the assets we are creating and we have paid back a lot of the higher (interest) rate debt which we inherited - Swansea Council leader Rob Stewart