East Suffolk householders facing first council tax rise in six years
06:00 29 January 2016
Having had their council tax frozen for six years on the trot, people living in Suffolk Coastal are set to face a 2% rise in the district share of their bills for the next four years.
District councillors will be recommended to agree a rise of £2.97 for a Band D property – an increase of 1.99% to keep it below the 2% threshold at which electors could call a referendum to approve or reject the rise – formally next month.
Residents will also receive demands from the county council, expected to increase its tax, the town or parish in which they live, and from Suffolk Constabulary.
The council tax funds nearly 60% of Suffolk Coastal’s budget and the proposed increase is needed in the face of substantial and rapid reductions in Government support grant and increasing costs to maintain its services.
In a report to the council’s cabinet, Geoff Holdcroft, deputy leader and cabinet member with responsibility for resources, outlined the changes in funding streams which would impact severely on the authority’s finances.
He said: “Against this backdrop, and the scale of funding reductions indicated, the council should consider adopting a strategy of increasing council tax year-on-year at the maximum referendum limit levels.
“Council tax increases at 2% per annum – generating around £150,000 additional income each year – would offset funding reductions to some extent and build up the income base.
“An increase of 1.99% is proposed for 2016/17 to 2019/20 and is reflected in the budget and Medium Term Financial Strategy presented in this report.”
Councillors are also recommended to amend the council tax charges for empty, substantially unfurnished properties from 25% discount for a three month period to 100% discount for one week followed by a full charge.
The council had been hoping that the Government’s plan for local authorities to benefit from a share of business rates if they generate extra economic growth would pay dividends, but the system is complex and does not guarantee huge amounts of cash, and is proving difficult to forecast.
Mr Holdcroft said the council had decided to budget prudently with regard to the business rates as the actual income received since the introduction of the system in 2014 had been subject to “considerable volatility” due to appeals and refunds.
Meanwhile, money received from the New Homes Bonus is more settled – £1.49m this year and £2.1m next year – but its future is uncertain and the Government is currently carrying out a review of the system, preferring to divert the money into social care.