Council tax rise reduced to 3.99%

A proposed council tax hike for Shropshire householders has been cut by one per cent.

Bills were set to rise by 4.99 per cent from April – the maximum legally allowed without a local referendum – to raise an additional £8.2 million in the council’s 2021/22 budget.

This was made up of a 1.99 per cent general increase and a three per cent ring-fenced ‘social care precept’.

But leader Peter Nutting said part of this should instead be found from reserves to take some of the burden off rate payers, given the financial hardship many people are now facing as a result of the pandemic.

Speaking at a cabinet meeting on Monday afternoon, Councillor Nutting proposed an amendment to the financial strategy asking that it be re-evaluated on the basis of a 3.99 per cent rise instead.

Councillor Nutting said: “The government have provided us with a provision that we can defer some of the social care precept for a year.

“It means we don’t have to take all the increase now and instead we can come back and have another look at it in a year’s time.

“So while the officers have assumed a three per cent precept in 2021/22 we could instead agree a two per cent precept in 21/22 and take a further one per cent in 22/23, providing us with the same overall resources in the long term.

“I understand why officers had planned for an overall 4.99 per cent increase but I also need to think about the people who have to pay it after such a difficult year.

“If we agree a 3.99 per cent council tax rise in 2021 I believe that would remove about £1.6 million from next year’s budget.

“I can ask officers to go and find additional savings to pay for this, but those are going to take a little time to work up.

“For now, we could pay this by utilising more of the financial strategy reserve.”

Councillor Nutting said he would ask officers to look again at the financial strategy with the reduced council tax rise in mind and bring a revised version to a meeting of the full council on February 25 for it to be signed off.

The strategy also sets out where £9.9 million in cuts will need to be made to council services in order for the authority to balance its books in the next financial year.

It says the council is predicting an overspend of  of £2.8 million for 2020/21, based on the position at the end of quarter two, but cabinet members were told that this amount was likely to drop following quarter three.

Councillor David Minnery, portfolio holder for finance, said: “A provisional look at the figures suggests that the situation has improved significantly. It’s looking as thought the full year deficit will be considerably less than we were looking at at the half-year stage.”

Councillor Nutting added: “Every year the first quarter seems awful, the second quarter seems less awful, and as we go through the year we get far nearer to getting our budget back in balance.

“I suspect it will be the same this year, although it has been an incredibly difficult year with the pandemic and even now we are still working through figures to try and understand exactly where we are.

“I wouldn’t like to predict whether we will hit the right target or we will be slightly out, it’s such a difficult year to really know where we are and it may be several months before it all becomes clear.

“But we will always do our best for the people of Shropshire, as we have been doing.”