Fresh bombshell on council tax

BOMBSHELL news that council tax bills in Suffolk could be heading for an increase of 12 per cent next year were revealed by The Evening Star last night. And that will be a big blow for tax payers coming on top of this year's 18.5pc hike in bills.

By Paul Geater

BOMBSHELL news that council tax bills in Suffolk could be heading for an increase of 12 per cent next year were revealed by The Evening Star last night.

Suffolk County Council warned that it will need to spend eight per cent more next year to keep

services at the same level, taking into account inflation and increased demand on services.

The announcement came on the day before the government gives an indication of how much extra it intends to give local authorities next year.

But it will send a shiver down the spine of anti-council tax protesters who fear another big rise next April.

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If the government increases its grant by eight per cent, council tax bills would need to increase by the same amount to retain the same level of services.

However, because of the "multiplier" effect – as council tax payers only pay about a third of the budget – if the government funds less than eight per cent, residents will see their proportion of bills increase dramatically. The alternative is to lose services.

If the government increases its grant by 6pc – the amount it increased them last year in what it described as a "generous" settlement – and the county wants to retain services at the current level, this would mean its element of council tax bills going up by 12pc.

The government is due to give its first indication of the grant level in a statement from local government minister Nick Raynsford today.

The county is looking for savings, but the level that would be needed to bring down council tax bills could leave many services looking very vulnerable.

Deputy county council leader David Rowe said: "We have been doing all we can to make sure any increase in council tax is reasonable for tax payers.

"We have lobbied the government for a realistic increase. We have shown our commitment to a reasonable level of council tax by already identifying £5million of savings and are continuing to look for further savings."

He said the full details of the budget would not be published for some time.

"Whatever level of funding we receive from the government we will still have to do a great deal of detailed analysis before we can say what the level of council tax will be next year," he said.

Opposition Conservative leader Jeremy Pembroke was horrified to hear that the rise could be as high as 14 per cent.

He said: "My group, council tax protesters and the people of Suffolk would not be at all happy about a rise of this level next year.

"I would be very cross, and it bears out what I have been saying throughout this debate – that there needs to be a concerted effort to bring down administration costs at every level at County Hall."

* How the multiplier works:

For every £100 spent by the county council, £64 comes from the government and £36 from council tax payers.

If the budget is put up to £108 and the government grant increases by 6pc, the actual amount from the government goes up to £67.84.

That means the amount paid by council tax payers goes up from £36 to £40.16 – and that's 14 per cent.