Herefordshire Council will decide whether to approve a 4.99% increase in council tax when councillors meet in February.

From Herefordshire Council:

At this stage in the council’s budget setting process, the level of government funding to be made available by MHCLG is not yet known and major changes planned to the Local Government Finance System in 2021/22 have been delayed by MHCLG due to the pandemic. The council has made sensible assumptions based on the information available to us now while taking into account the current impact of Covid-19 being felt against Council Tax and business rates.

Taking into account these assumptions, the council is facing a worst case budget gap of up to ¬£16 million for the next financial year. This will need to be revisited once the government’s settlement is announced in late December, however, we need to plan at this stage for the worst case scenario.

Including spending of £80 million on council maintained schools, the council is budgeting to spend £320 million in 2021/22.

For this level of expenditure, for an average Band D property in Herefordshire, the Council Tax per month in 2021/22 would equate to £137.69 (last year £131.15) and the till receipt at the bottom of the page shows how this is broken down on a monthly basis.

This situation in having to find large scale savings is common across all local authorities and Herefordshire Council has been adept in the past at managing. Through financial planning over the medium term and effective management of its reserves, the council has been able to develop a Transformation and Savings Programme that allows time for sustainable implementation and meaningful consultation, be that either internally with staff or externally.

COUNCIL TAX & SOCIAL CARE PRECEPT:

In 2016/2017 the government allowed local authorities with social care responsibilities to raise an additional 2% Council Tax ‘precept’ to support vulnerable people. This flexibility was subsequently increased to allow local authorities to increase the precept to 3% per annum.

The government’s Spending Review 2020 on 25 November 2020 confirmed that the core Council Tax limit will remain at 2% and a social care precept of 3% will also be permitted (5% in total). Given this new flexibility from government, the council would be keen to utilise and protect the delivery of valued services.

The increase in Council Tax is subject to approval by Full Council in February 2021, and the feedback we get through this consultation helps local councillors make a final decision.

A rise of 1.99% in 2021/22 would contribute £2.2 million towards local council services, and coupled with a 3% social care precept would contribute a further £ 3.2 million. This would mean an increase of approximately £ 78.53 per year (or equivalent to £6.54 per month) for a band D household.

POTENTIAL SCHEMES TO SUPPORT VULNERABLE RESIDENTS:

There is growing evidence that people are struggling financially as a result of the Covid-19 pandemic. As applications to our Council Tax Reduction Scheme have increased compared to previous years, the council is considering ways to help its most vulnerable residents.

We wanted your views on two ideas. Firstly, whether residents would be willing to pay more Council Tax if the increase helped residents on low incomes.

Secondly, whether residents would support the introduction of a voluntary Community Contribution Scheme. A number of councils across the country have either introduced, or are considering introducing, a voluntary contribution scheme to fund residents’ priorities, for example, supporting local children and young people to create the best start in life.

The council is considering introducing a voluntary scheme to provide additional funding for residents’ priorities, if the decision is taken to progress this, then there will be a further consultation on the detail of how the scheme will be operated.