Staffordshire authorities fear more cuts after tax freeze 'shortfall'
FREEZING local taxes for a third year as part of a Government incentive scheme could leave cash-strapped councils and emergency services hundreds of thousands of pounds worse off than they expected.
Communities Secretary Eric Pickles is again offering financial inducements to councils, police and fire services which agree to freeze tax.
But the offer on the table for 2013/14 is equivalent to just a one per cent increase.
The Sentinel has learned that authorities in the region were budgeting for bigger tax increases from April than the Government is prepared to pay for. It means they face huge budgetary black holes on top of the ongoing spending cuts triggered by Government grant reductions.
Staffordshire Fire and Rescue, which has accepted tax freeze grants for the last two years, had banked on a four per cent increase for 2013/14. It now faces a £700,000 shortfall.
Finance director David Greensmith said: “A three per cent reduction is £700,000 in real terms and that will be in addition to announcements on funding reductions.”
Staffordshire Police Authority said it was ‘cautious’ about budget forecasts but had banked on a two per cent increase after two successive years of freezing its 13 per cent portion of the council tax bill.
The force expects a £650,000 shortfall if it accepts the Government’s tax freeze incentive. Authorities are effectively being blocked from increases of more than two per cent under threat of having to win permission from residents with a referendum.
Similar incentives in the last two years were equivalent to a 2.5 per cent rise.
Labour-run Stoke-on-Trent City Council defied the Government to impose a 3.49 per cent tax increase this year, after leaders said they needed the extra cash to invest in economic growth. The authority said it is awaiting news on its Government funding settlement before deciding on council tax charges.
A spokesman said: “In these extremely challenging and uncertain times, the effect of the cap on the level of council tax increase has limited our flexibility and options.”
Tristram Hunt, below left, Labour MP for Stoke-on-Trent Central, said the one per cent freeze incentive did not go far enough. He added: “It’s another example of the Government hammering low income parts of the country.”
Conservative-run Staffordshire County Council, which receives £1,028.81 from the council tax bill for Band D properties, is an exception as it will be better off than expected. Leader Philip Atkins said: “We had already agreed to freeze tax for next year.”
City Independents councillor Dave Conway, leader of the opposition on Stoke-on-Trent City Council, said he has little sympathy with the prospect of the city’s funding shortfall.
He added: “This council wants to borrow £40 million to spend on a new civic centre – that is not responsible.”