Notts council funding to be increased but Ashfield Council leader concerned over potential council tax hike

The leader of Ashfield Council has warned of future council tax hikes and questioned the Chancellor’s Spending Review funding for local government.

By Andrew Topping
Monday, 1st November 2021, 11:11 am

Chancellor Rishi Sunak announced a three-year, £4.8 billion package to increase local authorities’ spending power by the end of the current parliament, viewed as a ‘move in the right direction’ by some councillors.

It will spread an additional £1.6 billion a year across councils between 2022 and 2025, used to shore up services and provide a 3 per cent boost after more than a decade of cuts.

It comes alongside the new Health and Social Care Levy, gained through a ringfenced 1.5 per cent National Insurance rise next spring.

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Chancellor Rishi Sunak with his Budget Box ahead of presenting his Autumn Budget and Spending Review to Parliament.

For someone earning £30,000 a year, this rise will mean paying an additional £255 each year to specifically fund social care reforms.

The Government hopes the levy will allow councils to ‘continue to provide other local services’ without relying on the existing social care council tax precept. This was introduced to support authorities funding the service.

In 2021/22, the precept equates to almost 10 per cent of Nottinghamshire Council’s council tax bill – or £149.64 out of £1,580.85 for a Band D property.

This total does not factor in the precepts charged by district and borough councils, the fire authority and police and crime commissioner.

In total, the average Band D property in Nottinghamshire is paying £2,120.72 throughout 2021/22, Government figures show.

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Analysis

But independent analysis by the Office for Budget Responsibility, the Government body which monitored Mr Sunak’s plans prior to his Spending Review, expects precepts to hike further in the coming years.

The OBR’s report suggests council tax receipts could rise by £2.2bn nationwide by 2025 compared with 2019/20.

Using Nottinghamshire averages for a Band D property in 2019/20, it means residents paying as much as £2,454.90 in 2025 compared with the £1,976.85 average two years ago.

It comes at a time when fuel, energy and supermarket prices are on the rise, and alongside the increase in National Insurance from April.

Petrol and diesel prices are currently at their highest rate since 2012, while millions of households are being urged not to swap energy providers after wholesale prices doubled in the past year.

The OBR is also forecasting inflation to average at about 4 per cent over the next year, more than the boost on offer to local authorities in the Spending Review.

Concerns have been raised by Coun Jason Zadrozny, Ashfield Council leader, who warned of raised council tax precepts next year, despite welcoming the £4.8 billion boost.

He said: “After 11 years of drastic cuts to councils like Ashfield and Nottinghamshire, this local government funding will still leave spending dramatically lower than 2010.

“The Chancellor announced he has increased spending on local government by the biggest amount in a decade – it’s an incredibly low bar.

“We’ve suffered austerity and cuts, year-on-year, by the Conservatives.”

“This is a move in the right direction, but councils will continue to be on life support, as you can’t overturn a decade of austerity by increasing spending by less than inflation.

“This may still lead to council tax increases.”

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