Bus pass scheme holds the key to Council Tax rise

THE popularity of bus travel could determine how much Huntingdonshire s Council Tax payers have to stump up for district council services from April. HDC cannot set a budget – or a Council Tax precept – until it knows how much grant it will get from centr

THE popularity of bus travel could determine how much Huntingdonshire's Council Tax payers have to stump up for district council services from April.

HDC cannot set a budget - or a Council Tax precept - until it knows how much grant it will get from central government.

And the difficulty is compounded by the unknown costs of a new national free bus travel scheme for elderly, disabled and some other people from April.

Not only does HDC not know how much extra money the Government will provide for extending the present Cambridgeshire-wide off-peak free travel scheme that covers 15,000 people in the district, but the more popular it is the more it will cost HDC.

The total set aside by Whitehall to pay for extending the scheme nationally is £212million, but the Treasury has not said how it will be allocated to England's unitary authorities and 238 district councils, HDC finance director Terry Parker said.

Bus operators have been promised the full marginal costs of carrying the extra passengers, but until the bums go on seats next year it is impossible to predict the extra costs locally.

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Two-thirds of HDC's net income comes from Whitehall, but the council will not know how much that will be until December.

Nor has the Government fully explained the basis on which it will be calculated. In particular, part of the formula is the "area cost adjustment" - designed to address the fact that it costs more to recruit and retain staff in some local authority areas than others - and previous settlements have included floors and ceilings in grant changes councils are due, which means expanding low tax-base areas such as Huntingdonshire have subsidised industrial areas with shrinking populations.

The outcome of all these uncertainties will determine how much Council Tax HDC will need to raise to pay for services. It will also have to guess at what the capping regime will be for next year - someone it will probably not know until after the budget and Council Tax precept have been set next February.

It cannot assume it will be the same as this year, which limited councils to a five per cent rise in precept and budget.

When it made an assumption that the then Office of the Deputy Prime Minister would apply the same regime two years running - in that case that councils with below ­average tax levels could increase them by more than five per cent, as the previous year - it was capped at a cost of £60,000 in re-billing.

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