Council tax increase on the cards as local authority struggles in face of government cutbacks
Lincolnshire County Council has proposed a council tax increase of 3.95 per cent for next year and to use £23 million from its reserves in order to cover government cutbacks.
The proposed increase includes a 1.95 per cent general council tax hike and 2 per cent adult social care precept for 2019/20, which is still 1 per cent less than in the previous year.
It comes as part of budget measures which will go before the council’s executive on December 18.
Senior councillors will consider the plan, which includes further business rates retention, before it goes out to consultation.
Final budget plans will come back to the authority’s executive on February 5, 2019.
Meanwhile, the council is expected to see further cuts in grants from central government.
Money from the council’s revenue support grant, which is the main source of funding from government, is expected to fall to £20.139 million.
It means the authority will have seen a £50.212 million cut in its grant over the past four years.
As a result, the county council has forecast a shortfall in its budget of £23.092 million.
But the authority has proposed to dip into its reserves in order to balance the books.
In a report which will go before senior councillors next week, Peter Moore, executive director of finance, said the use of reserves would “smooth the effect” of the cuts.
“This is a one off contribution to the council’s budget shortfall and is planned to smooth the effect of reductions in funding on implementing service changes and reductions,” he said.
However, the county council used its reserves in 2018-19 as well to balance its books due to cuts, when it took out £12 million as part of a £35 million two-year budget plug.
But council leader, Councillor Martin Hill, said the authority will only be able to provide the “most needed services” without guaranteed funding in the future.
“We have found year-on-year savings for the past eight years and by 2020 our main government grant will have fallen by more than 90 per cent over a decade,” he said.
“It is likely that we will be using the reserves that we have left to help meet our £23 million budget shortfall for next year.
“We will also need to look at reducing spending where we can and raising more income.
“However, without sustainable and guaranteed government funding, we will struggle to provide anything more than our most needed services after 2020.”
A 3.95 per cent increase in council tax would generate an additional £10.986 million for the local authority in 2019/20.
However, should councillors decide to back a further 1 per cent hike then the total would increase to £13.769 million.
The council has also bid to the government to continue to retain a portion of its business rates as part of a pilot programme.
Under a previous plan, the authority retained 100 per cent of its rates which the council gained an estimated £7 million from.
The council said half of the money will be spent on children’s social care, while the other will be spent on design work for highways schemes.
Now, the council has bid to continue the pilot but is expected to only retain 75 per cent under government plans.