Sunday, 29 January 2012

UNISON warns of even deeper cuts if North Somerset Council accept Council Tax Freeze Grant

A shortened version of this press release appeared in this week's Weston Mercury. Probably won't make us popular with the public, but we need to start a debate at least.

North Somerset UNISON, which represents public service workers across the district has warned of even deeper cuts if North Somerset Council accept the government’s council tax freeze grant for 2012/13. There are a number of councils across the country of all political colours, including Conservative administrations in Surrey, Chelmsford and Peterborough, who are rejecting the freeze grant because it will create black holes in their budgets for future years, and because it’s the only way to protect vital public services, as central government slashes their funding.

The council tax freeze grant is not a good deal for councils for a number of reasons. First as a grant equivalent to 2.5% of council tax income it is well under inflation, which currently stands at between 4 and 5%. This means that councils’ income isn’t keeping up with their costs. Second, it is only funded for one year, which means councils will have a hole in their budget for next year and every year after that. In North Somerset’s case this means that every year from 2013 onwards they will have £2.3 million less to spend on services. The situation will get even worse from 2015 because the funding for last year’s council tax freeze drops out, and as a result North Somerset’s budget hole will be almost £5 million a year. And this is all on top of the £50 million of cuts that are already underway in North Somerset.

The problem is that the one off income from the freeze grant only stays in their base budget for 1 year, whereas an actual council tax increase stays in their base budget for every single year. The government have made it even more difficult for councils to provide services to their residents by imposing a 3.5% cap on council tax increases and stipulating that any increase above that will require councils to hold a local referendum - with all the costs associated with that. But if for instance the council increased council tax by 3.5% this would not entail a referendum, and it would also increase their budget for the following year by £3.2 million, at an extra cost of £3.35 a month for the average council tax payer. A similar increase every year for the following 2 years would significantly improve their base budget by almost £10 million. Councillors could then think about saving services, and those North Somerset residents who have been campaigning recently to have street lights turned back on, or to save youth services may have good ideas about what they can spend this extra money on.

On the other hand, if North Somerset Council accept the council tax freeze grant it will mean much higher council tax increases in the future, or alternatively even deeper cuts. For instance, North Somerset residents are currently being consulted on reductions in library opening hours. If the council accept the freeze grant then it is likely that in future they will be consulted on library closures instead. The alternative would be much greater council tax increases to save services, as well as the costs of a referendum. Local government minister Eric Pickles has said that councils have a moral duty to accept the council tax freeze grant, but Mr Pickles and the Coalition government also have a moral duty to ensure that funding to councils is at a level at which councils are able to provide services. A rejection of the council tax freeze grant will send a clear message to Westminster that North Somerset Council, as a low-funded authority, cannot provide essential services on the current levels of government funding, and that increasing council tax is the only way to protect vital public services to our most vulnerable citizens.

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