Council tax in Hartlepool could go up by almost 4% after the council was hit by an extra £2.1 million cut in Government funding.
Hartlepool Borough Council found out just before Christmas that its government grant cut for 2016-17 would be £4.9million less than last year compared to the £2.8million it had budgeted for.
The ongoing immense financial pressures being imposed by the Government and their change in Council Tax policy means difficult choices need to be madeCouncillor Christopher Akers-Belcher, Hartlepool Borough Council leader
The council’s Corporate Management Team, led by Chief Executive Gill Alexander, is recommending an overall council tax increase of 3.9% to ensure a “sustainable financial strategy”.
A report on the financial issues facing the council will be considered by its Finance and Policy Committee on Monday, January 11.
If the rise is supported by councillors and approved at Full Council next month, the council says most Hartlepool households – 72% of bill payers in Bands A and B properties – will see an increase of 83p a week.
And it adds for the 96% of households receiving Local Council Tax Support, the increase will be no more than 10p per week.
Hartlepool council leader, Councillor Christopher Akers-Belcher, said: “The Council has managed to freeze Council Tax in Hartlepool for the last five years but the ongoing immense financial pressures being imposed by the Government and their change in Council Tax policy means difficult choices need to be made regarding the level of Council Tax and service cuts.
“I am sure there will be a very open, frank and meaningful debate at Monday’s Finance and Policy Committee and whatever recommendations are reached will be subject to a meeting and final decision involving all 33 councillors at a meeting of the Full Council on 18 February.”
The report for Monday’s meeting states that the Government acknowledges that the era of Council Tax freezes are over.
Previously councils were encouraged by the Government to freeze council tax and received a financial incentive to do so.
But the council says this is no longer the case due to a change in Government policy which also shifts the responsibility for paying for social care on to local authorities.
The report states the Government assumes that local councils will increase the level of council tax by 3.9% a year which includes a new 2% Social Care Levy.
In Hartlepool, the levy would raise £655,000 towards social care, otherwise it would have to find savings from elsewhere.
If councillors agree to the rise, the report says the council will be able to fund the remaining Government grant cut in Government grant through savings and the use of one-off resources.
Monday’s meeting, starts at 9.30am in the civic centre and is open to the public.
The authority says that by 2019/20 it will have seen its funding cut by two-thirds, or £38million, compared to 2011/12 when the austerity cuts were first introduced.
It is also reeling from the loss of £3.9m in Business Rates every year following a decision by the Valuation Office Agency to reduce the rates paid by Hartlepool Power Station.
The Government’s new higher National Minimum Wage which comes into effect from April adds more pressure on finances.
Coun Akers-Belcher described the Government’s financial settlement as a “ruthless attack” on the people of Hartlepool adding: “The further Government grant reduction announced in December and changes in Government policy in relation to how councils are funded have left councillors with some incredibly tough decisions and stark choices.
“This comes at a time when we have set out our ambitions for taking the town forward for the benefit of residents, businesses and visitors, but we will not be beaten in our endeavours.”