Council tax up in the air for now

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PLANS for council tax rates in Hartlepool remain up in the air while senior councillors wait on more details from the Government.

Finance chiefs at Hartlepool Borough Council had initially planned for a 2.5 per cent rise, but next year’s bills could still be frozen if the authority instead accepts a Whitehall grant.

If councillors decide not to accept the grant, the actual rise is likely to be just below two per cent rather than 2.5 per cent after the Government also announced a referendum threshold of two per cent.

The council’s cabinet committee met yesterday to discuss the issue as part of ongoing work to set the 2013-14 budget.

If a 1.99 per cent rise is agreed, about 42p a week for a Band A or B property, then income from council tax will be £200,000 lower than it would have been for a 2.5 per cent rise.

Meanwhile, if council tax is frozen the one per cent grant is worth £400,000 to the council for 2013-14 and 2014-15.

A report by Chris Little, the authority’s chief finance officer, said: “Following the cabinet meeting on October 4, the Government announced details of the proposed 2013-14 council freeze grant and referendum trigger points, as follows:

“Council tax freeze grant – a one per cent grant will be paid to local authorities which freeze the 2013-14 council tax at the current level.

“This grant will be paid for two years - 2013-14 and 2014-15.

“Council tax referendum threshold – this will be reduced from 3.5 per cent in 2012-13 to two per cent in 2013-14.”

That is expected to be approved by Parliament in December and Mr Little told councillors in view of the recent announcement, they needed to reconsider the level of council tax.

Members decided to defer a decision until December to wait for further details on the overall grant allocation from Government.

Mr Little said: “It shows how much uncertainty there is and how many changes are coming through.

“This is probably the most uncertain time we have had, given the cuts we have had to make over the last two years.”

Councillors were reminded that temporary council tax freezes mean permanent funding reductions because less money is coming into the base budget.

As previously reported, the council needs to save between £18m and £20m from its £91m budget between 2013 and 2017.

Mayor Stuart Drummond said: “Can I ask for something to be brought back on what impact the welfare reforms are going to have on council tax bills and how many people are going to have to pay council tax for the first time.”

He added: “We need to take all of that information into account before we go setting the council tax due to the impact on the less well off.”

Mr Little confirmed a report on those issues would be coming back to the cabinet committee in December.