Felixstowe.

Felixstowe: Council tax rise agreed for resort because of worry over government grant

Monday, January 28, 2013
2.00 PM

COMMUNITY leaders have agreed to raise their council tax – feeling they were forced to take action to stave off uncertainties over the future.

Felixstowe Town Council wants an “insurance” because of the doubt over whether councils will be capped next year and also if government grant given this year will be available again.

If the worst happens, it will leave the council with a hole in its budget of anything up to £65,000 – forced to make savings and possibly impose a large tax increase to cover the gap.

In order to plan prudently for the future, the council agreed to raise its precept by £10,000 to £508,420, which would mean an extra £2 a year – four pence per week – for a band D household from April.

The extra £10,000 would be set aside in a special fund and only used if needed – if the grant was available then the council tax next year would be frozen or even reduced.

Councillor Andy Smith said the extra money would act as an “insurance” to help offset problems should the worst happen.

“The only certainty is uncertainty,” he said.

“It would be improper to raise the tax for the whole £65,000 now because it might not happen – it might not be needed. It’s about managing the risk – giving ourselves some ability to cushion it when the time comes.

“The extra money will be an insurance against what might happen and put into a separate pot to make any increase next year less painful.”

Labour councillor Mike Deacon said: “I think the whole arrangement is an absolute mess created by government.

“I think we are in a terrible dilemma and this council has done well to resolve it because what happens next year is very difficult to predict.”

The uncertainties have arisen because of government changes to way council tax and benefits are being administered to save money.

The town council was due to peg its tax until Suffolk Coastal said it could claim the grant and raise its precept.