Council tax in Peterborough is now set to rise by six per cent from April as the city council looks to tackle its huge deficit.
Having previously agreed a five per cent council tax increase in December, the council is now looking to increase that by a further one per cent, with half of the overall six per cent rise ringfenced for adult social care.
The decision follows an announcement by the Government in December that local authorities can increase council tax by six per cent, instead of five, without having to call a referendum.
If the new rise is agreed, the average council taxpayer (Band B) will pay £1,015 in 2018/19 - £57.38 more a a year than what they paid in 2017/18.
It would also mean that council tax has increased by 15 per cent in the past three years, although the council says it is currently the sixth lowest out of 56 authorities in the country.
Explaining the reason why council tax needs to increase by six per cent - which will generate close to £4.2 million in extra revenue - council leader Cllr John Holdich said: “At present we receive £171 less per person in government funding than an average London borough and £63 less than an average metropolitan authority.
"Our funding levels are lower, yet we are the fourth fastest growing city. If we received fairer funding we would not have to be making difficult decisions such as increasing council tax in Peterborough.”
The Conservative-run council has to make £24 million of savings in 2018/19 after its main government grant was cut by 80 per cent in eight years.
More than £3 million of those savings were agreed by the council in December, leaving the rest of the savings still to be found.
The total deficit until 2021 is £43.5 million.
The council launched its Stand Up For Peterborough campaign last year to call for extra government funding so the city receives as much money per person as other authorities.
Cllr Holdich added: “Peterborough has seen an 80 per cent drop in its government funding (from £55 million to £10 million) in just eight years. This is despite it being the fourth fastest growing city in the country, with the fourth highest birth rate and the 14th most deprived area in the UK, all meaning increasing demands on its services, such as temporary housing for the homeless, school places, public health and adult social care.
"To put it simply, our levels of funding are based on out of date population estimates and we have to do more with less. Peterborough has had a 200 per cent increase in homeless levels in just two years, it’s the only local authority in the deprivation decile with public health funding of £57, well below the national average of £59, and our Adult Social Care budget is ranked as one of the lowest in the country.
"Writing for the Sunday Telegraph ahead of the Local Government Finance Settlement, LGA (Local Government Association) chairman Lord Porter warned core government funding to councils will be further cut in half over the next two years and completely phased out by the end of the decade, leaving local authorities with a little choice but to increase council tax income.
"He went on to say that even this won’t be enough to plug the funding gaps faced by councils. This is the situation Peterborough City Council finds itself in, while trying to protect vital services to the public.
“We are not alone in this and I am confident we will see the tide turn in the coming months as the shortfalls in funding in specific areas of England and Wales are nationally highlighted. Together, we are not calling for widespread reforms, rather, fairer funding for areas like Peterborough in which the current funding formulas simply do not work.”
Cabinet member for resources Cllr David Seaton said: “We launched the Stand Up For Peterborough campaign last year and already we have had success in bringing the campaign messages to a national stage.
“We have met and explained the city’s unique situation with government experts, MPs and other key stakeholders and are taking part in a national project led by the Bureau of Investigative Journalists aimed at highlighting the funding differences between local authorities. We will continue to lobby government and gather support from people in our city who have pledged to Stand Up For Peterborough."
People can pledge support to the Stand Up For Peterborough campaign by writing to Cllr Holdich or by signing up online at www.peterborough.gov.uk/StandUp.
The budget document and an online consultation questionnaire can be found at www.peterborough.gov.uk/budget.
The cabinet will now consider the proposals at its meeting on Friday, February 9.
Comments received up to 5pm on Friday, February 23 will then be considered by the cabinet on Monday, February 26.
The consultation will close at 5pm on Monday, March 5. Full Council will consider the proposals on Wednesday, March 7.
Hard copies of the budget proposals document and questionnaire will be available at the Town Hall and Bayard Place receptions and in each of the city's libraries by the formal launch of the consultation on Monday, February 5.
Further budget articles can be found at https://www.peterboroughtoday.co.uk/.