Government shifts burden of funding council services to local taxpayers

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Council Tax and Business Rates payers in Nottingham are set to shoulder an increasing burden of funding local services.

This is because of more Government cuts and changes to how public services are funded, with the Chancellor announcing that councils are expected to increase Council Tax by a further 2% to pay for social care.

The expected cuts mean that the City Council has to find a further £20.5m of savings from its 2016/17 budget. The council proposes a 1.95% increase in Council Tax and a reduction of 55 posts to help stave off significant service impacts – on top of a reduction over the past four years of 610 posts. It continues to focus its efforts on changing the way services are provided and pursuing commercial opportunities while minimising the impact of cuts on vulnerable citizens.

The Government’s austerity measures have seen its revenue grant for Nottingham more than halve since 2013/14 with a loss of £70m. And the Government plans to phase out the grant it provides to councils altogether by the end of the current Parliament – shifting funding arrangements from national taxation to local taxation through Council Tax and Business Rates.

The 2% levy for social care will raise £1.8m – but this will not meet the cost of over £4.7m the city needs to care just for the additional elderly and disabled people requiring services each year.

And the cuts Nottingham faces remain unfair when compared to other areas. Independent think-tank the Institute for Fiscal Studies and the National Audit office agree that funding cuts have fallen heaviest on those councils, including cities like Nottingham, with the highest levels of deprivation and consequently the highest dependence on grant funding. This is in addition to the disproportionate loss the city and other Midlands and Northern cities have already suffered. Over the last two years, Nottingham households have lost £254 while those in Windsor have gained £34 in ‘spending power.’

Proposals to balance the 2016/17 budget include:

  • Increasing day care fees and charges from £12 to £15 a day in line with national guidelines
  • Removing subsidy for new self-funders for residential day care
  • Making annual savings of £123,000 in street lighting, including extending dimming onto residential streets
  • Introducing a £3 fee for non-city resident concessionary pass holders using bus Park & Ride sites
  • Saving £178,000 through a review of fees and charges in sport and culture
  • Increasing income from commercialising some services such as commercial waste and skip hire (£250,000 a year).

Nottingham City Council’s Deputy Leader, Councillor Graham Chapman, said: “Every year since 2010 we have faced huge cuts in Government funding which pays for local services – forcing us to make difficult decisions about if and how services can continue to be provided.

“By next year the Government’s grant to the City Council will have more than halved since 2013, which is harsher than for many more affluent places whose citizens don’t rely so heavily on council services.

“The Government’s intention is that support for local services, which were previously funded from national taxation, will have to be paid for by local taxpayers out of Council Tax and Business Rates. The Government is also assuming that councils raise Council Tax over the next three years as well as levying a 2% social care precept on the Council Tax.

“This is a fundamental shift in how public services are funded which not only threatens vital services, but undermines our ability to help create the right conditions to grow our local economy and ensure there are jobs and other opportunities for local people. Services will deteriorate and opportunities will be lost. In particular the care for the elderly is being undermined, as is investment in economic development and jobs.

“It is yet another case of moving funds from the North and Midlands to the South, from the worst off to the better off, and from the national tax payer which includes the City of London and large corporations, to the local tax payer many of whose incomes are so low they are below the tax threshold.”

 The council remains committed to doing what it can to protect services that are a priority for citizens, such as keeping crime and anti-social behaviour down, keeping Nottingham as a clean city, weekly bin collections and supporting services to protect children and vulnerable adults.

The proposals will be considered by the council’s Executive Board on Tuesday December 22nd after which people can give their views on the budget proposals so far and to continue to provide any suggestions on how to make further savings, through the Your City Your Services process, at: www.nottinghamcity.gov.uk/yourcityyourservices and at consultation meetings in January.

People can comment on the draft budget proposals outlined at Item 7 here http://committee.nottinghamcity.gov.uk/ieListDocuments.aspx?CId=177&MId=5040 from now until just before the budget is approved at the full council meeting on March 7th 2016.

 

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