Peterborough City Council to explore raising council tax by maximum amount to tackle budget concerns

Peterborough City Council has said that it will fully consider the benefits of raising council tax by the maximum permitted level to combat its rising costs.

In the Chancellor’s autumn statement in November, it was announced that councils would be able to increase Council Tax by up to 2.99 percent (without requiring a referendum) as well as being able to charge an additional two percent Adult Social Care precept.

In January, the council raised tax bills by 2.99 percent.

The council has said that an increase of 4.99 percent would add £75.43 per year (or £1.45 per week) to the city council element of the bill for a typical band D property and take the total city council element of Council Tax to £1,587.08 (£30.43 per week).

Such an increase would raise £4.6m towards the council’s rising costs.

Budget consultation documents state: “In line with our Budget Principles, we’ll fully consider the benefits of increasing Council Tax in line with the maximum referendum limit to ensure the council is best placed to continue providing the same range and quality of services.”

Documents also offer a breakdown of how each penny in a pound of council tax is spent.

How does the council spend your tax?

Spending of each pound roughly works out to:

Adult social care 42p, Children’s social care 32p, Highways and transport services 3p, Planning and development services 2p, Cultural and related services 2p, Housing services 5p, Central services 4p. Environment and regulatory services 9p.

What is the council’s budget gap?

The council has drawn up plans for a budget consultation that it plans to release to the public on December 5 and run until January 8.

In October, it was estimated that the budget gap faced by the council for the 2023/24 financial year could be as high as £21.7m.

This was due to “unprecedented levels of inflation, a nationally agreed pay award for staff creating at least an additional two million pounds pressure and the council expecting to receive less than originally anticipated from its membership of the Cambridgeshire Business Rates Pool.”

This forecast has since been reduced but projections from the yet-to-be-released 2023/24 budget suggest that the council will still be facing a £2.6 million gap after savings. This is then set to rise to £3.9m in 2024/25 and £4.2m in 2025/26.

In order to pass a balanced budget, the council has outlined its approach to saving money.

This is:

- Continue to look for ways to reduce spending and get a better deal from those organisations the council relies on to provide services

- Continue to transform the way services are delivered, doing things differently in a way that improves outcomes and doing more for less or have somebody else do it cheaper.

- Reduce the capital programme. The capital receipts programme has reduced the risk of future interest rates exposures and the cost of borrowing by selling some of our assets.

• Stop ‘non-vital’ services or charging more and consider the statutory obligations to those who need help and support the most.

• Manage inflationary pressures by bringing in external expertise, controlling expenditure and reviewing all contracts.