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Monday, 28 July 2014

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Carlisle council's tax rise plans scrapped

A council tax rise has been scrapped amid claims that the Government is causing cash chaos.

Colin Glover photo
Colin Glover

Carlisle City Council had been planning to raise its share of rates by 1.99 per cent in the next financial year.

But its leaders have done a U-turn on the plans just days before the most crucial decisions on the budget are due to be taken.

It is a move that has had the authority’s finance chiefs hurriedly redoing their sums to make sure proposals add up.

And it’s a situation that council leader Colin Glover, and Les Tickner, the councillor who holds the authority’s finance brief, argue could have been avoided had the Government been clearer about what the impact of freezing council tax would be.

Councils have been encouraged by Whitehall in recent years to freeze tax rates in return for grants. But the future of those had been uncertain, potentially leaving those who decided to keep rates as they are with a financial hole to plug.

But new Government guidance, issued only days ago, shows the grant will remain – making it more attractive for councils to freeze tax.

Mr Glover is angry at the decision coming just before authorities are due to make final decisions on next year – and after public consultation has ended.

He said: “We are pleased that this gives us the opportunity to freeze council tax with some reassurance that the grant will continue into future years.

“However, Government could have taken this decision months ago.

“Councils around the country are now having to rewrite budgets only days before setting them as a result of central government dithering.

“We have taken the bold decision to freeze council tax not only this year but next as well.”

The freeze decision is likely to mean that the city council has to find another £51,000 of savings in the next financial year – a total that is likely to have to come from its balances.

Number-crunchers are working to finalise the total and the impact of the freeze in the future, with the authority already having to find savings of £3.9m between 2014-15 and 2018-19. From that, £1.8m of efficiencies need to be found by 2015-16 and £2.1m in later years.

Dr Tickner believes the fact that 124 authorities had indicated they would be ignoring Government advice to freeze council tax in favour of raising rates, in an attempt to protect public services, has pushed the Government into rethinking its stance on cutting grants.

He said: “The cynical timing of this about-turn by the Government means councils will quickly have to reassess the medium term impact on revenue after the majority of them have gone through their consultation.

“The public have had enough of cuts to services.”

The city council’s budget will be debated at a meeting on February 4.

Cumbria County Council is proposing to accept the Government’s grant to freeze council tax for the fourth year running.

Eden councillors will debate a proposed 1.99 per cent council tax rise next week.

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