Council Tax for Peterborough residents is set to rise by five per cent from April 2017 with the majority of the increase spent on adult social care.
Peterborough City Council will increase council tax by the maximum amount allowed without needing a referendum, with three per cent of the increase having to be spent on adult social care.
The council had already proposed to increase council tax by four per cent but has upped that amount after the Government allowed local authorities to increase the adult social care precept from two to three per cent.
Another five per cent council tax rise is also budgeted in for 2018/19 before dropping back down to two per cent in future years.
The measures are announced in the second and final phase of budget proposals which will bridge the council’s £28 million deficit following large government cuts.
The council has lost more than half of its government grant since 2010.
Councillor David Seaton, cabinet member for resources at the council, said: “We understand that council tax rises are not popular and that is why we have worked hard to keep rates low over recent years. Even with the proposed increase residents will still be paying the lowest council tax anywhere in Cambridgeshire.
“The vast majority of the rise will be used to protect services for the elderly and most vulnerable. Within the budget proposals, our investment in care services far exceeds the money generated by levying the adult social care precept.
“We hope residents understand why we are proposing an increase, as the alternative is having to make even more savings which will inevitably lead to service reductions or some services being removed altogether.”
The proposed increase in council tax, which will be voted on in March, would mean that the Band D council tax charge would rise from £1,173.04 to £1,231.57 per year - an increase of £58.53.
The average property in Peterborough is in Band B, meaning council tax would rise from £912.37 to £957.88 per year - an increase of £45.51.
A council spokesman said that out of 56 unitary authorities across the country, Peterborough currently has the fifth lowest council tax.
Pensioners in receipt of council tax support will continue not to pay any council tax and a single person discount of 25 per cent will still apply.
The adult social care precept of three per cent will bring in approximately £1.9 million for the council.
This will fund a large part of the £2.3 million extra spend on adult social care in the next financial year.
The council’s budget document states: “Peterborough is impacted by a number of local factors, including care homes charging above the average rate.
“There has been a significant increase in the number of self-funding residents (those that met the financial threshold) becoming fully funded by the council which contributes to the increased pressure on adult social care budgets in the city.
“For those that the council provides care for in their own home there is also additional financial pressure due to the impact of the minimum wage on the council’s homecare spend.
“To add to this, the overall cost of homecare has gone up alongside a rise in demand, coupled with more people with complex needs requiring more intensive support.
“There is a further financial impact on budgets due to the increasing number of people requiring nursing care in their care home. This is care provided by a registered nurse.
“Other pressures include the increase in the amount of mental health placements and a number of transitions of young people moving into adult social care services that often require high cost services to respond to complex needs.”
Since April 2016, 574 adults over the age of 65 have lived in a residential or nursing care home, while the council is helping 2,331 people in their own homes.
In addition, the Peterborough population is expected to increase by 17 per cent from now until 2021, of which people aged 85 and over are expected to increase by 40 per cent and those aged 55 and over by 26 per cent.
Council leader Councillor John Holdich said: “Every year we have the challenge of managing an increasing demand on council services with a reducing amount of money. Since 2010 our central government grant has been cut by over half - a reduction of £57 million.”
Cllr Holdich added: “However, we remain committed to delivering improved efficiency first and foremost and for another year we are proposing a balanced budget without any reductions to services.
“Instead we are investing in the services which are most important to our residents and support the continued growth of the city.”
The phase one budget proposals agreed last month saw the council make £18.8 million of savings, but since then new financial pressures have come forward including government cuts to education in Peterborough.
The phase one proposals saw council lawyers get a pay rise totalling £132,500 and £48,000 to be spent on the re-instatement of winter attendants at Central Park and Itter Park.
A £186,000 pay rise for councillors - which was approved by the Conservatives at an earlier date - was also rubber-stamped, as was a £15 million investment to buy land and property in North Westgate to kickstart the much needed regeneration of the site.
Consultation: have your say
People can take part in the budget consultation by visiting the council’s website at www.peterborough.gov.uk/budget. Included is a link to the budget proposals document and an online questionnaire.
Hard copies of the budget proposals document and questionnaire will be available on Town Hall and Bayard Place receptions and in each of the city’s libraries by the formal launch of the consultation on Monday, February 6.
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