Taxpayers in Huntingdonshire to face huge council tax hike

COUNCIL Tax in Huntingdonshire could leap by more than one-third in two or three years’ time to compensate for loss of Government grant that is almost certain after this week’s Budget.

COUNCIL Tax in Huntingdonshire could leap by more than one-third in two or three years’ time to compensate for loss of Government grant that is almost certain after this week’s Budget.

Raising Huntingdonshire District Council’s precept to the average of the 200 other district authorities would raise an extra �2.6million, according to council leader, Councillor Ian Bates.

The council fears that central government grant – currently almost �13million a year – could be cut by as much as 35 per cent (�4.55million).

The idea of a huge hike in Council Tax precept is just one of a number of money-raising and money-saving options on which the council will be consulting members of the public, businesses, its own employees and other public sector organisations over the coming months.

The plan is to get a feel by the end of September for what measures would be acceptable to people in readiness for publication of the Treasury’s comprehensive spending review on October 20, which there will be some indication of how much pain will be felt where.

HDC aims to fill an assumed funding gap of �5million over the next three years. But Council Tax is likely to be frozen in the first and possible also the second year of that period, so the 36 per cent hike could all come in 2013/14.

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“We are trying to protect front-line services, which are a crucial part of the delivery of this council,” the leader said.

HDC’s services include refuse collection and recycling, planning, leisure centres, housing services, licensing and car parking. Less than 10 per cent of the council’s budget of �80 million this year comes from Council Tax. After income from planning and licensing fees, leisure centres and car parking charges, HDC is having to find �25million from central and local taxpayers.

In addition to the Government’s �13million contribution, Council Tax will account for �7.24million, and �4.7million will come from reserves – primarily what is left of the proceeds of the sale of the housing stock to social landlord Luminus in 2000.

Those reserves, of which there will be around �11million left by the end of next March, are likely to be raided again next year to help meet the funding gap, Cllr Terry Rogers, executive councillor for finance admitted.

But every �1 removed from the reserves is �1 that is not earning interest, which, until the Bank of England progressively reduced rates to 0.5 per cent, was a nice little earner for HDC.

Other potential savings and money-spinners on which HDC will be consulting include rationalising its senior management and staff numbers by not automatically filling vacancies, freezing pay, sharing support functions with other parts of the public sector, ‘re-shaping’ services, increasing the cost of activities at the district’s five leisure centres and putting up charges for activities such as licensing, planning and car parking.

HDC’s share of Council Tax is quite small. The 20th lowest rate of the 200 district councils in England takes less than �125 from a benchmark Band D household. A 36 per cent hike (which is what would be required to achieve the average) would pull in an additional �44.70 a year or 86p per week.

But it would not be as simple as that: HDC is not acting in isolation. Every other component of Council Tax – the county council and police and fire authorities – will be facing almost identical funding pressures, and all are well below the average in the precepts they currently levy.

So, if the whole of the Council Tax went up by 36 per cent, that would add more than �500 a year to the Band D bill for local services. That would make the eyes water.

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