Council budget and tax rate approved
A council has “no choice” but to raise tax, and authorities that seem more lenient might just be waiting until May’s elections are over, a cabinet member has said.
Telford & Wrekin Council voted to approve a 2021-22 budget, which includes a basic council tax increase of just under five per cent, with a ring-fenced “adult social care precept” accounting for three fifths of that rise.
Band-D households will see their annual basic bill increase by £67.54 to £1,421.02.
Councillor Rae Evans, who holds the finance portfolio in the Labour administration, said the increase was the only way to maintain services and protect vulnerable residents.
Conservative opposition leader Nigel Dugmore said the budget “increased financial pressure on individuals while the pandemic is still with us”, while his deputy, Adrian Lawrence, criticised the administration for quadrupling borrowing over the last decade.
Cllr Lawrence said that, when the Conservatives lost power in Telford and Wrekin in 2011, the debt stood at £117 million, and the incoming administration’s first budget criticised that level.
“Now we have a budget in front of us which is debt-fuelled, one which plans to increase the borrowing to £465 million.
“Our net budget is £137 million. Our debt is 3.3 times that, a big burden for any organisation.”
Cllr Dugmore said the pandemic had made future interest rates less predictable, and said he had “increasing concern regarding repayments”.
Liberal Democrat leader Bill Tomlinson said he supported the council’s “sound” borrow-to-invest strategy.
“It’s borrowing against actual assets and it’s creating new income at the solar farm, in Nuplace, and other areas,” he said.
A report by council Chief Financial Officer Ken Clarke said the four megawatt solar farm, at Wheat Leasows, near Horton, generated £200,000 annually while council-owned housing company Nuplace Ltd made a £573,000 pre-tax profit in 2019-20 and was expected to increase this in the current year.
But Cllr Lawrence argued that “maybe only 60 per cent” of the £465 million debt generated income, with the rest going on “legal fees, repairs and the highways”.
Cllr Dugmore said: “Politicians on all sides agree now is not the time to increase financial pressures on individuals while the pandemic is still with us.
“It is, therefore, astonishing this Labour administration has chosen to hit residents with an immediate 4.99 per cent increase; a kick in the teeth to hard-pressed residents who have managed to negotiate their finances through the impact of the pandemic and a killer punch to those who have not.
“Yes, we all agree the three per cent increase for social care is necessary. However, this administration has chosen to increase Council Tax by the full 1.99 per cent. Shropshire went for one per cent, and some authorities went for none at all by using reserves.”
Cllr Tomlinson said adult social care and children’s services were “necessary increases in expenditure to help the most vulnerable”.
“It’s with absolute pride that I see our local authority step up to the mark and provide the additional money despite the fact the government has reduced the money it gives to authorities,” he added.
“If the government continues taking money from us it can, unfortunately, only come from one other area.”
Cllr Evans acknowledged some councils had chosen to spread the adult social care precept rise across two financial years or hold back on increasing their core Council Tax.
“But, call me cynical, you’ll probably find that most of those have elections coming,” she said.
“And be under no illusion. They’ve not given up the right to collect the rest in the next financial year.”
Members of the Labour group voted to approve the budget, and were joined by independent Newport North and West councillor Peter Scott. The Conservatives and Liberal Democrats abstained.
