Peterborough tax payers shoulder heavier burden of costs of city services
Businesses and residents in Peterborough are bearing an ever greater share of the cost of providing services across the city.
The city’s rapid growth over the last decade, which has seen 1,000 new homes built each year and more businesses move into the city, has fuelled a 57 per cent increase in business rates and Council Tax paid to Peterborough City Council.
Figures released by the council show business rates are expected to bring in £52.8 million next year, going up to £54 million in 2024/25 with Council Tax raising £91.5 million next year but going up to more than £100 million by 2024/25.
At the same time, the council is managing to generate about £78 million in additional income outside of local taxes and Government funding.
Despite the city’s growth, the increase in local tax payments is still not enough to meet the council’s current £195,260 million spending commitments.
In addition, Government financial help through the Rate Support Grant has fallen from £55 million to £10 million.
It has left the council with a budget gap of £26.8 million which has prompted the launch of a two phase spending review, which will roll on into the spring.
Some £6.5 million of savings plus £3.2 million of funding changes along with £700,000 of extra costs have already been identified in the first phase leaving the council with a reduced funding gap of £17.8 million for the financial year 2022/23, which is expected to rise to £21.1 million in the following year.
Peter Carpenter, the council’s director of resources, said: “Since 2013, we have had a 57 per cent increase in local tax income - Business Rates and Council Tax.
“A factor in this is that Peterborough is a growing city.
“We grow by about 1,000 homes a year and we are often in the top five fastest growing cities in the country, and on top of that the council gets increases in business rates as new businesses start.
He said: “We have been growing rapidly but in overall terms, looking at the money, there is a far bigger burden on the Business Rate payer and the Council Tax payer than there was 10 years ago.”
Despite the importance of economic growth, the council’s list of savings in phase one of its review includes an eventual scrapping of its funding for the council’s economic development company Opportunity Peterborough, which would save £65,000 next year and £140,000 annually for the next two years.
Cllr Fitzgerald said: “I am pro-growth - it generates revenue that comes back to the council to support its core budget, so I’m keen to keep going at pace on economic growth and development and OP has served a purpose but they like everybody else is being asked to tighten belts.
Pressure on the council to agree a balanced and sustainable budget is intense with council chiefs warning that failure to do so could lead to Government intervention.
Council leader Councillor Wayne Fitzgerald said: “We have rising demand for services and yet we have diminishing budgets so we are having to cut our cloth accordingly.”