Credit crunch could force up Council Tax bills

FALLOUT from the credit crunch and massive hikes in energy and fuel prices will inevitably impact on Council Tax next year, senior councillors were warned last week. Not only have Huntingdonshire District Council s costs risen as a result, but its incom

FALLOUT from the "credit crunch" and massive hikes in energy and fuel prices will inevitably impact on Council Tax next year, senior councillors were warned last week.

Not only have Huntingdonshire District Council's costs risen as a result, but its income from planning applications is being hit by the reduction in house-building, and higher mortgages and repossessions could reduce people's ability to pay the tax, Councillor Terry Rogers, executive councillor for finance, warned HDC's cabinet.

A provisional budget predicts income from planning applications will fall by £150,000 in each of the next two years, as developers hold back on building new homes until selling prices pick up.

However, the reality is that HDC still has significant reserves of cash left over from the £80million sale of the housing stock to what is now social landlord Luminus eight years ago, which will cushion short-term cashflow difficulties.


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Delayed implementation of new parking charges, which should have started a year ago if the cabinet had not ducked the decision, will cost £80,000 in the current year. But, because HDC decided to increase charges by between two-thirds and 100 per cent - double the originally planned increase - it expects to be £113,000 a year better off from next year as a result.

Concessionary bus fares, under a national scheme that began last April, could cost at least £1million, and extra journeys on the guided bus after its introduction next spring could push the bill up even further, particularly if parking were free at the St Ives park-and-ride site, the cabinet was told.

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As things stand, HDC's precept is still on course to increase by just under five per cent from April 2009 - but that represents just eight per cent of Council Tax bills. The rest is made up of the costs of Cambridgeshire County Council (about 75 per cent), parish councils (some of which cost more than HDC) and the police and fire services.

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