Council tax rises on the way as local authorities try to stay afloat
From The Guardian: Local authorities in England are teetering on the edge of a financial crisis, with most planning to increase council tax from April while continuing to cut services, a survey has found.
The annual finance survey from the Local Government Information Unit thinktank (LGIU) comes days after Northamptonshire county council became the first town hall in two decades to declare effective bankruptcy. Severe financial pressures had left the council unable deliver a workable budget.
The LGIU warned that the Northamptonshire crisis was potentially the “tip of the iceberg”, with four-fifths of councils concerned about their financial sustainability amid uncertainty over funding and the accelerating costs of social care.
“Councils are on the edge. They are, for the most part, holding services together – although a significant minority are not. But they can only do this by raising council tax, increasing charging and draining their reserves,” said Jonathan Carr-West, chief executive of the LGIU.
The chair of the Local Government Association (LGA) said the survey showed some councils were being pushed “perilously close to the financial edge”, adding that many more would face huge challenges in setting budgets for the coming year.
“Extra council-tax-raising powers will helpfully give some councils the option to raise some extra income, but will not bring in enough to completely ease the financial pressure they face,” he said. “This means many councils face having to ask residents to pay more council tax while offering fewer services as a result.”