'Budget cuts will be necessary' even after Telford council tax goes up

In an online question-and-answer session, Councillor Shaun Davies said Chancellor Rishi Sunak’s Spending Review was based on the assumption local authorities would raise council tax by the maximum allowed by law, which is five per cent in Telford and Wrekin’s case.

A question from a member of the public asked Councillor Davies to “do all he can not to raise council tax” in 2021-22, but the Labour leader said he had “bad news”.

“When the system is being stacked meaning you either put the council tax up by the prescribed limit, or have to make cuts, that unfortunately does mean council tax will have to go up,” he said.

The foreword to the 2020 Spending Review said the measures in the document “support local authorities through increasing core spending power by an estimated 4.5 per cent in cash terms next year”.

The review, presented to Parliament by Mr Sunak last week, says the government has provided more than £3 billion in “additional Covid-19 support” to councils.

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By law, local authorities have to hold a referendum if they wish to raise council tax by more than two per cent. The review says this rule will remain in place in 2021-22, but “social care authorities will be able to charge an adult social care precept of up to three per cent”.

A Local Government Association briefing, published on the day of Mr Sunak’s announcement, said: “Councils will still have to find savings to already-stretched budgets in order to plug funding gaps and meet their legal duty to set a balanced budget next year.

“Council tax rises have never been the answer to the long-term pressures faced by councils, particularly in social care, raising different amounts of money in different areas, unrelated to need.”

Explain

Responding on Telford & Wrekin Council’s Facebook page, Councillor Davies pointed out the LGA is a multi-party organisation, chaired by a Conservative council leader, and said his administration was working with others “to explain to the government the losses we’re seeing and asking them to help support us in that”.

Councillor Davies said: “Right at the start of this pandemic we were told by the government to do ‘all that it takes’ to support businesses, residents and communities, and that’s what we’ve done. That has cost Telford & Wrekin something in the region of £24 million, and that’s on top of all the other things we spend money on – adult social care, safeguarding children, neighbourhood services, enforcement.

“I don’t expect any thanks at all, but we have got the lowest council tax in the whole of the West Midlands and we will always have, while I am leader, amongst the lowest.

“And, even if you put the council tax up by five per cent, at the moment, that would still see further cuts next year on top of the £115 million of cuts we’ve had to make since 2010.

“In areas like ours, when the economy is on the downturn and people are really finding the cost of living an issue, five per cent is a huge amount of money. We want to work together to avoid that.

“I’m not one to be unfair; the government have done a huge amount across the piece. They just need to understand the impact upon councils, because it will be councils in local areas that will drive the economic recovery, working with our businesses, the voluntary sector, and so on. We want to make sure we’re in a strong place to lead that recovery.”