Council bosses say many frontline services will be under serious threat over the next few years following a cut near £4m cut in business rates from Hartlepool Power Station.
Hartlepool Borough Council leader, Councillor Christopher Akers-Belcher said the town will be hit hard after learning the Government is not prepared to intervene to prevent the council from losing £3.9m in business rates every year.
It follows a decision in May 2015 by the Valuation Office Agency (VOA) – which the council cannot appeal - to review the rateable value they had set for the power station in 2010.
As a result of the VOA decision, the rateable value of the power station has been reduced by 48% - resulting in an annual reduction of Business Rates received by the council of £3.9m.
The level of business rates previously paid to the council by the power station represented a quarter of the total business rates received by the authority.
The news comes at a time when the council is already facing further major cuts in Government grant and anticipates it will have to make savings of £14m over the next three years to balance the books.
Coun Akers-Belcher said: “This is a massive hammer blow and it will undoubtedly be a major threat to our ability to provide some key frontline services in the future.
“Over the last five years, the Government has reduced our main grant by almost 40%, a cut in spending power per resident of £391, which is more than twice the national average cut of £131 per resident. We’ve worked really hard to manage this and limit the impact on frontline services.
“I was really hoping that the Government would have listened sympathetically to our plea on this occasion given the scale of business rates loss and recognise that the business rates retention system they implemented is failing the people of Hartlepool. Clearly they have a total disregard for the needs of the Hartlepool community which is hugely disappointing and very worrying.”
Councillor Akers-Belcher also attacked the Government for its unfairness as other power station appeals show that Hartlepool council faired much worse than other areas.
“There just isn’t any logic in the decision to reduce the rateable value of Hartlepool Power Station by 48% and Hinkley Point, Heysham 2 and Sizewell B by 28%, 21% and 8% respectively. It’s not a level playing field and this is not right.”
Council finance chiefs say that replacing the £3.9m loss in business rates from the power station would require the creation of 2,740 small businesses - a 48% increase on current levels or the creation of 2,700 averaged size new homes.
Councillor Akers-Belcher concluded: “We will not give up the fight and will continue to press the Government for a fair deal. We owe it to the people of Hartlepool to be resolute and not give in because this is a totally unacceptable situation and they deserve better.
“I can’t bare to think of the impact on services that this could have and we will fight it all the way.”