Council tax is set to go up in Hartlepool for the first time in the last five years as the council agreed £4million of budget cuts.
Hartlepool Borough Council leader Christopher Akers-Belcher said the authority would have to find a further £400,000 cuts if it does not bring in the rise next year.
Coun Akers-Belcher said: “The risk if the council does not accept a 1.9% council tax increase there could be further cuts to the budget.
“We would have to find a further £400,000 if we don’t put the council tax up.”
At the year’s last full council meeting, councillors approved cuts to meet a £4.179million black hole in its finances.
Difficult decisions will need to be made in 2016-17 and 17-8Councillor Christopher Akers-Belcher, Hartlepool Borough Council leader
It will be made up of £4.735million departmental budget cuts – offset by grants and increased income to £3.088million – and using £1.091million of reserves.
Coun Akers-Belcher said the cuts are in response to expected continued reductions in government funding for Hartlepool and millions of pounds a year less from Hartlepool Power Station’s business rates.
Over the next two financial years the council is forecasting a £24.8million government funding cut. Coun Akers-Belcher said: “The Medium Term Financial Strategy outlines the significant financial pressure facing this council over the next three years because of ongoing government cuts which will no doubt have a disproportionate effect on Hartlepool.”
He has written to Prime Minister David Cameron seeking a meeting over the cuts.
Coun Akers-Belcher said: “Difficult decisions will need to be made in 2016-17 and 2017-18,” but added: “The overall package provides the best financial position for 2016-17 and future years.”
The council expects to learn what next year’s settlement from the Government will be next week.
Council tax levels will be decided by the full council in February next year.
But a cut in Council Tax Benefit is due to be kept at 12% instead of the 20% that other local councils have made under the Local Council Tax Support Scheme to help hard-pressed families.
Hartlepool council has also been hit with an annual £3.9million cut in income from business rates from Hartlepool Power Station after a decision in May by the Valuation Office Agency. The council says it needs to find £14million in savings from across all departments in the next three years to cope with a 39% cut in its grant from central government over the last five years.
It is facing a black hole in its finances of £9.417million next year, reduced to £4.179million due to factors including reserves, ICT and interest rate savings and an increase in the council tax base.
Over this year, each council department has been tasked with finding where it can make savings totalling £4million.
Councillors approved the budget by 26 votes in favour to three against. A proposed amendment, by independent Seaton councillor Paul Thompson, to scrap councillor ward member budgets to save £132,000 was outvoted.
Coun Thompson said the money could go towards protecting frontline services.