It is unlikely that Council Tax raised for Babergh for the 2009/10 financial year will be more than 3.5% higher than this year’s number. This is the message that came out of this morning’s joint meeting of both Babergh Overview and Scrutiny Committees which met to consider next year’s budget.
The anticipated rapid fall in inflation is not much help to Babergh since the nature of the Council’s costs are rather different from the components of the RPI. A pay rise for staff of 3% for the period in question is already committed. There may however be some respite from lower energy costs which impact on our gardening and waste disposal contracts.
In fact looking ahead at present is more than usually difficult, and it has to be said that there remains scope for nasty surprises. Fees for Land Charge Searches and Planning applications are already down, reflecting the economic situation, and these areas are unlikely to pick up before 2010. As has been seen in the Press, the prices for recycled waste are at rock bottom which affect the finances of our waste activities (although we have managed to mitigate this to some extent in the short term due to the nature of our contracts). The bottom line is that there is a large funding gap looming which will mean that the Council will be obliged, as was already expected, to eat into reserves.
Even were Babergh not committed to trying to keep Council Tax rises in line with inflation it would be difficult to fund this gap by increasing Council Tax. The rise would need to be disproportionately high. It is not generally known that in a 1% increase in Council Tax for Babergh does not produce very much money, only £40,000 or so, which is small considering the fact that the net budget is c.£10m, and the gross budget four times this number.
It has occurred to me, and to a few others, that, in the light of the forthcoming demise of Babergh, since the sum of money raised by an increase in Council Tax is so small, it might be a noble gesture to our hard pressed taxpayers to go for a 0% increase this year. It is a seductive idea, but one which is unlikely to attract the more conservative councillor (with a small C!) However, if 0% proves impossible, I would, (as a Conservative councillor with a big C), prefer to see a 2 rather than a 3 as the ‘big figure’ of the increase.
People should however bear in mind that a 0% rise would in reality merely be a gesture (although to my mind there is nothing wrong with gestures, particularly of the ‘farewell’ nature). Babergh’s share of total Council Tax paid is very small, the County and the Police absorbing a far larger share. The difference between 0% and 3.5% would only represent a few pounds per household.
