Council tax in Peterborough projected to rise more than 10% by 2025

"Budgets are not the most exciting things." So said Peterborough City Council (PCC's) cabinet member for finance at a meeting called to discuss its proposed spending and saving over the next few years.

Councillor Andy Coles' (Conservatives) comments came as councillors considered how to entice more people to engage with consultation: just 50 people "in a population of thousands" filled in the online budget survey, as Cllr Shabina Qayyum (Labour) put it.

But Peterborough residents are likely to be interested in how the council tax hike PCC is currently considering will affect them.

The council is proposing a 4.99 per cent increase beginning in April, or the new financial year.

This would add £75.43 to the city council element of the bill per year for a typical Band D property.

But it could rise even more.

The council's medium-term financial plan assumes that a further 4.99 per cent increase will be added the following year and a 2.99 per cent increase the year after that.

So, on a Band D property, council tax would jump from £1,511.65 in 2022/23 to £1,587.08 in 2023/24 to £1,666.27 in 2024/25 to £1,716.09 in 2025/26 if this assumption proves correct.

That’s an increase of £75.43 then £79.19 then £48.82 - a total of £204.44 over three years.

This would follow the 2.99 per cent increase Peterborough residents saw last year.

Currently, the council tax on Band D properties is, on average, £1,884.33, with the majority of this going to PCC (although smaller sums go to the Fire Authority and Police and Crime Commissioner among others).

More council tax is crucial to its plans, PCC says, as - along with business rates - this makes up some 80 per cent of its core funding.

“We know that residents are facing their own financial challenges and we wish we didn’t have to ask them to pay more council tax,” Cllr Coles said at the meeting.

“But we cannot deliver a balanced budget and continue to provide the services people want and need without doing so.”

This is something most people understand, according to a ‘budget simulator’ exercise PCC invited residents to undertake between October and November last year.

In total, 185 people had a go at balancing the budget themselves with most finding the imminent increase “acceptable”, according to Cecille Booth, the council’s executive director of corporate services.

But the picture was different among the 50 people who filled in the more traditional consultation survey, with around two thirds saying they don’t agree with the rise.

What's clear is that PCC must act to ensure its future financial stability.

In October last year it was forecast that the budget gap for 2023/4 could exceed £20m.

The council says its new budget is balanced for this period, but Cllr Coles conceded that its financial forecasting will never be "bulletproof" while gaps remain in subsequent years' funding (£0.5m in 2023/4 and £1.1m in 2025/6).

He blamed a "perfect storm" of factors for increased financial pressure on the council which include inflation, higher energy costs, population increase, Covid and the war in Ukraine (which sent refugees to local authorities across the UK).

The council's draft budget will be considered by the cabinet on 13 February before final approval.