Fears Plymouth Council Tax will rise to plug £3.2million budget gap
THE city's finance chief has refused to rule out council tax rises next year.
With Plymouth City Council facing a £3.2million budget black hole, there are fears rate-payers may have to help plug the gap.
Now Councillor Mark Lowry, the Cabinet member for finance, has left the door open to a council tax hike.
"The last thing we want to do is to burden people with higher council tax," Cllr Lowry told a council scrutiny meeting.
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But he added: "Next year we will have to ask the grown-up question: What services do residents want to see cut?"
Cllr Lowry was responding to questions from opposition Conservative councillors.
His predecessor, former council finance chief Cllr Ian Bowyer, warned: "A hundred thousand council taxpayers are looking at this with some trepidation and they need reassurance."
Cash incentives from the Government aimed at encouraging local authorities to freeze their council tax are beginning to dry up.
And, as The Herald revealed earlier this week, 100 Plymouth town hall workers are now facing redundancy.
The council must make £30million of cuts over three years – on top of its £3.2million shortfall.
Cllr Lowry was challenged by Plymstock Dunstone Tory Cllr Kevin Wigens to pledge to freeze council tax for another year.
"We have always had challenges, and you need to rise to the challenge as we did," Cllr Wigens said.
But Cllr Lowry told him: "You were in power for five years and three of those years you got an increase in the Government grant but put up council tax.
"Yet again the Government has missed its inflation target and the last thing we want to do is to burden people with higher council tax.
"We have had two years of a council tax freeze funded by a Government grant.
"But next year we will have to ask the grown-up question: What services do residents want to see cut?"
Government funding cuts and rising demand for services have triggered the council's overspend on this year's £203million revenue spending.
The bulk of the shortfall, £3.1million, comes from increasing pressure on adult social care.
Councillors begin a detailed scrutiny of the budget next month and the Cabinet is expected to approve the final budget in February.
The new council tax rate is likely to be announced at a meeting of the full city council soon after.
Cllr Lowry said he had set every department a target to cut spending by five per cent.
The local authority is also seeking up to 100 voluntary redundancies – but has warned compulsory redundancies could follow if that target is missed.
There will also be a major shake-up of the senior management at the council, with the aim of saving another £1million.
But Cllr Lowry would not be drawn further on the subject of potential council tax rises.
He said he continued to be ambitious for investment and growth, and had set out a £60million capital programme for next year, rising to £132million by 2015/16. He said that it would be wrong to raise the money by selling off land and buildings in the current climate.
Instead, he said, he wanted to make city assets pay, if necessary borrowing money to pay for any work needed.
Speaking to The Herald after the meeting, Cllr Lowry said he had been handed a poison chalice by the Conservatives last Spring, when they accepted a Government handout of £2.5million to freeze council tax.
"All they did was to take a short-term bribe from the Government, knowing we would have to pay the bill," he said.
"They have been playing Jenga with council finances."
Cllr Lowry said he was frustrated at being asked the question by Cllr Bowyer and Cllr Wigens, who he said knew very well that no decision could be made in November.
He added: "Until George Osborne, the Chancellor, announces the rate support grant in December, we cannot make any decisions.
"It was a ridiculous question to ask me at this stage.
"If Osborne cuts the grant further – on top of the 40 per cent cut he has already made – we will have to make some really tough decisions about which services we can no longer support.
"But until then it's all hypothetical."
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