Hartlepool households face 6% council tax rise under budget plans

Councillors at a meeting of Hartlepool Borough Council’s Finance and Policy Committee will be asked to choose between a 4.9 per cent and 5.9 per cent rise.

Each is made up of a 2.9 per cent increase in the basic rate of council tax - the largest rise possible without triggering a referendum on the proposals - and a rise of either two or three per cent to account for the precept for Adult Social Care.

Related: {Hartlepool council departments face cuts of 40% amid £6million funding shortfall|https://www.hartlepoolmail.co.uk/news/hartlepool-council-departments-face-cuts-of-40-amid-6million-funding-shortfall-1-9002067}

The latter option will also mean an extra £365,000 to go towards the cost of looking after children in care.

A 4.9 per cent rise would mean households in Band A (55% of all properties in Hartlepool) would see a rise of 97p a week, while a 5.9 per cent increase would mean a £1.17 hike.

Households in Band B would pay either £1.13 or £1.36 and those in Band C £1.30 or £1.56.

No household would pay more than an extra £3.50 a week, even with a 5.9 per cent rise.

Bosses say council tax amounts for less than a quarter of total council spending, with the vast majority of local authority cash (almost two-thirds) coming from central Government in the form of a Revenue Support Grant, with business rates making up about 17%.

A report to the meeting, which is due to be held next Monday, says the 2.9% rise in the basic rate will generate an extra £1.785million a year - just a quarter of the shortfall in funding the council faces, with remaining three-quarters of the deficit made up from a combination of forecast housing growth, budget savings and use of reserves.

And it outlines why any cut in Revenue Support Grant (RSG) has a harder impact on councils such as Hartlepool: “The Government confirmed the previously announced RSG cuts, which means that local authorities will have faced nine years of RSG cuts by 2019/20,” it says.

“As reported previously these cuts have had a disproportionate impact on authorities, including Hartlepool, which are more dependent on RSG and have less ability to fund services from council tax and business rates income.

“Confirmation of these cuts means that the council will have to implement the planned 2018/19 and 2019/20 budget cuts.”

The Government has raised the threshold at which a referendum on council tax increases is required, but the report explains that a rise in RSG would have been better for council such as Hartlepool - and compares the town to a similar one in Berksire.

“Whilst the increase in the core council tax referendum limit and social care precept increases financial flexibility and secures recurring council tax income, this change is more beneficial to more affluent areas where the additional council tax increases will raise more recurring resources,” it says.

“For example, Department of Communities and Local Government figures show that Wokingham Council could raise council tax income of £34 per resident if they implement a council tax increase up to the 2018/19 referendum limit whereas Hartlepool could only raise £24 per resident.

“This means Wokingham can potentially raise approximately £1million of recurring income more than Hartlepool.

“The budget pressures in relation to Adult Social Care and Looked after Children are affecting the majority of authorities, and are particularly affecting authorities serving more deprived communities.

“Therefore, it would have been better for Hartlepool if the Government had recognised these issues by providing additional grant funding, rather than relying upon a further increase in council tax.”