Council tax bills expected to soar
Nov 27 2009 by Jonathan Walker, Birmingham Mail
MINISTERS have warned residents to expect above-inflation council tax increases, as they announced the annual round of grants for local authorities.
Local government minister Barbara Follett urged authorities to keep rises low, but said they could be close to three per cent – double the rate of inflation.
Birmingham is to receive funding of £678 million for the 2010-11 financial year, up by £18 million, a 2.7 per cent increase, compared to this year.
And other local authorities will receive much smaller increases. Solihull’s grant will be £54 million, up by £800,000, an increase of 1.5 per cent.
Ken Meeson, leader of Solihull Council, said the authority would struggle even to meet the Government’s target of a three per cent increase, and had set up a series of reviews to try to find ways to save money.
He said: “One issue we face is that, as a result of the Baby P case and the impact of the recession on families, the number of children on our at-risk register, and needing social service support, has doubled.
“There is also increasing demand for adult services, but we have not received extra funding to help us cope.”
The official inflation figure, based on the Consumer Price Index, is currently 1.5 per cent.An alternative measure of inflation, the Retail Price Index, is in negative figures – at -0.8 per cent. This is largely a result of falling house prices and lower mortgage bills, resulting from low interest rates.
Birmingham City Council has increased council tax by 1.9 per cent each year for the past four years, and is expected to do the same again next year – imposing an above-inflation increase, if inflation remains steady.
A council spokesman said no decision would be made until the council’s budget was approved in February.
The Government warned it would cap local authorities which imposed excessive council tax increases. But it also said it expected the average rise for a Band D property in 2010-11 to be “below a three per cent increase”.
And ministers warned that authorities would need to continue making “efficiency savings” to keep bills down.
Ms Follett said: “I expect to see the average council tax increase fall to a 16-year low next year while councils protect and improve front-line services. Already many councils are predicting freezes or cuts, so this can be done.”
