Latest news with #ExceptionalFinancialSupport
BBC News
17-03-2025
- Business
- BBC News
Council tax to rise across London as costs mount
All but three of London's local authorities are to increase council tax bills next financial year by just under 5%, the maximum allowed without a local Council will increase its council tax by 4.98%, while 28 other London boroughs and the City of London have levied maximum council tax increases of 4.99% from 1 in Wandsworth will see their bills rise by 2%, while council tax in Kensington and Chelsea will go up by 4%.Newham Council, which applied for extra support last year due to housing pressures from temporary accommodation, was allowed by central government to raise its bills by 8.99% in 2025-26. Cap on rises The 4.99% cap on council tax rises in England, which includes a 2% rise for adult social care, has been in place for the last three years. Usually a borough that wants to raise tax more than the cap has to hold a local referendum to approve the rise, but central government can authorise a higher increase. Seven London boroughs will also receive Exceptional Financial Support loans from the government of more than £418m for the next financial Councils, an umbrella body for the capital's local authorities, said boroughs in the capital received about 28% less in funding per Londoner compared to is calling for overall council funding to be restored to 2010 levels by 2028-29, requiring real-terms increases of 4% every Councils said emergency borrowing measures like Exceptional Financial Support put a burden on boroughs of further debts and would not be enough to return them to a stable financial added a combination of fast-rising demand for statutory services - where boroughs have a legal duty to provide support - and the increasing cost of delivering these services had led to substantial overspends in London council budgets in recent years. 'Consider impact' A spokesperson for the Local Government Association, which represents councils across England, said councils continued to face "severe funding shortages and soaring cost and demand pressures on local services".They added that councils had to make a "tough choice" about increasing bills to bring in "desperately-needed" funds."However, while council tax is an important funding stream, the significant financial pressures facing local services cannot be met by council tax income alone. "The Spending Review needs to ensure councils have adequate funding to deliver the services local people want to see." A Ministry of Housing, Communities and Local Government spokesperson said councils should "put taxpayers first and carefully consider the impact of their decisions"."That's why we are maintaining a referendum threshold on council tax rises, so taxpayers can have the final say and be protected from excessive increases," they reporting by the Press Association
Telegraph
15-03-2025
- Business
- Telegraph
The West Country experiment that proves Rayner's ‘mega councils' plan is doomed to fail
When a new unitary authority in Somerset was formed in 2023, it was hailed as the answer to the town hall's ever-increasing financial black hole. Yet only two years later, Somerset council is on course to hit a £190m budget shortfall by 2029 – forcing officials to impose an inflation-busting 7.49pc tax rise on citizens. At the same time, funding for public services from toilets to CCTV is being axed – meaning residents will never have paid so much for so little. The troubled financial state of Somerset is a stark warning to Angela Rayner whose 'mega councils' master plan – announced in the Devolution White Paper in December – is facing mounting scrutiny. Two-tier county and district councils across the country face being merged into one unitary authority, a local government body which is responsible for all services, in a bid to make much-needed savings. But, councillors have warned Ms Rayner that the alleged benefits from the scheme 'lack a serious and robust evidential base'. It is something Somerset residents can attest to. Since its 'unitarisation', services for public toilets, local theatres, CCTV and tourism visitor centres have been cut. The Liberal Democrats-run council has also been forced to introduce a new parking policy, which will impose Sunday charges at all car parks and scrap free parking. The cost of garden waste collection is rising too, from £68 to £73.50 next month. Meanwhile, the council tax rise will generate an extra £9m income and add an extra £129 a year on to the average household's bill. Desperate, the authority has been forced to start selling off its assets to make ends meet. These include a Marks &Spencer building in Yeovil, offices in Bristol and an NCP car park in Bournemouth. For the second year in a row, the council is using Exceptional Financial Support, which is funding granted by the Government. It has been given permission to sell assets or borrow money to a value of £43m. The authority has also cut 555 jobs to save £34m a year. Despite this, spending is still set to outstrip income by £101m for 2026-27, rocketing to £190m by 2029-2030. Martin Dimery, a Green councillor, said: ' Somerset county council was already in a financial crisis when it effectively absorbed the districts. This was due to the burgeoning costs of adults and children's social care against a backdrop of failing to keep council tax in line with costs. 'Far from saving money, Somerset county council has brought all the former districts down with the sinking ship.' The town hall plans to find savings of £47m this year and Bill Revans, the leader of the council, has admitted there will be further impacts on services. Somerset is far from the only cash-strapped unitary authority. Nottingham city and Birmingham city councils have both declared effective bankruptcy. Meanwhile Thurrock, which issued a Section 114 notice to declare effective bankruptcy in 2022, has debt of about £1.5bn. 'Crippling financial problems' Cllr Jeremy Newmark, of the District Councils' Network (DCN), said: 'Many new large unitary councils have experienced crippling financial problems. 'Claimed savings promised by the proponents of mega councils lack a serious and robust evidential base. Given that reorganisation will incur substantial upfront costs, we must be clear that any savings may not emerge for many years.' A Conservative Party spokesman said: 'Last year, we set out five key tests that any restructuring should meet – and Labour have failed at every hurdle. In addition to the extra costs, the mass postponement of elections is unprecedented and entirely wrong.' Somerset council has previously pointed to the fact that it has one of the highest rates of pensioners in the UK, with roughly 25pc over the age of 65. This means the town hall has particularly suffered with the rise in adult social care costs. Somerset's rural location makes matters worse, as it can be a round-trip of 90 minutes for a carer to see one customer in their home. Elliot Keck, of the TaxPayers' Alliance, said that reorganisation risked 'simply papering over the cracks,' rather than dealing with the root of issues such as social care costs. Jonathan Carr-West, of the Local Government Information Unit, said: 'The scale of financial challenges faced by councils is so great that even the maximum potential savings from reorganisation will not by themselves be enough to put local government on a sound financial footing.' Almost half of councils in England risk falling into bankruptcy without action, according to the National Audit Office. But a report says local government reorganisation risks simply reinforcing the status quo. The report, conducted by Inner Circle Consulting for the DCN, found it would be 'a hugely costly and disruptive process that will simply create larger versions of semi-functional or dysfunctional arrangements that aren't delivering for those that need it the most or for the nation as a whole.' 'It's like running up a down escalator' Mr Revans this week told a Government committee that unitarisation had produced significant savings, but rising costs negated these: 'The cost pressures of social care are rising at a rate faster than our ability to make savings. It's like running up a down escalator. We are making these savings, but cannot do it fast enough to meet the demands.' A spokesman for the County Councils Network highlighted that there are 'very specific reasons' for why certain unitary authorities are struggling, but that in cases such as Buckinghamshire, Cornwall and Wiltshire, unitarisation has been a success. A Ministry of Housing, Communities and Local Government spokesman said: 'This Government inherited a crumbling local government sector and existing, long-standing financial pressures are seriously impacting councils like Somerset. 'That's why we're giving them additional support to help manage these pressures.'
BBC News
09-03-2025
- Business
- BBC News
Cumberland Council criticised for £23m borrowing as tax rises
A council has been criticised for approving plans to borrow £23m while raising council Council approved its budget this week, meaning families will pay £4.99% more council tax - between £1.16 and £1.76 more each councillor Gareth Ellis said he believed it was not a budget for residents, but for a council that was "knee-deep in debt". Councillor Barbara Cannon, who is responsible for finance at the Labour-led authority, said the council was facing "significant financial pressures" but would continue to protect its most vulnerable residents. She said funding was "insufficient" and there was no alternative but to ask for Exceptional Financial Support (EFS) from the Government totalling £ said that borrowing was not a "dirty word" because it helped in areas such as providing infrastructure, the Local Democracy Reporting Service disagreed with Labour leaders' claim that it was a "balanced budget", because it required such extensive borrowing. 'Huge debt' Independent councillor Robert Betton raised concerns about the council tax increase at a time when people were "struggling with the cost-of-living crisis".For residents on low incomes who may need help paying the tax, the budget includes funding worth £22m a year for the Council Tax Reduction meeting at the civic centre in Carlisle approved a gross revenue budget of more than £800m, of which the net budget of £333m is paid for through council tax, business rates and government to a report presented to councillors, the main change for the 2025-26 financial year was the introduction of the second homes premium, which would see council tax double for second homes from 1 Lib Dems and Green parties proposed amendments to the budget but they fell when put to a vote. Councillor Mike Johnson, the leader of the Conservative group, said the council was in debt to the tune of £244m, most of which was inherited from the former Cumbria County said: "If the budget is approved it will continue to increase." Follow BBC Cumbria on X, Facebook, Nextdoor and Instagram.
BBC News
05-03-2025
- Business
- BBC News
Stoke-on-Trent City Council approves budget with 4.99% tax rise
Stoke-on-Trent City Council has approved its budget for the new financial year, including a 4.99% council tax rise and a £16.8m loan from the said the budget would help stabilise finances without requiring compulsory redundancies or major cuts to front-line includes £7.5m of savings, including £1.1m of cuts such as plans to dim some street lights, as well as increasing leisure centre prices, which were subject to a public consultation. Councillors voted in favour of approving the new budget at a full council meeting on Tuesday. The council tax rise is the biggest increase allowed without a referendum and will include the previous adult social care precept of 2%.Band A households will pay an extra £53.85 to the city council in the 2025-26 financial year, while Band D households will pay £80.75 more budget includes £16.8m of Exceptional Financial Support (EFS), which is an emergency loan from the government to help struggling councils. 'Payday loan council' Opposition Conservative councillors have accused Labour of mismanaging the local authority's finances and failing to make difficult decisions, saying that the city's taxpayers would be left having to pay back the EFS for years to group leader Dan Jellyman described the council as a "payday loan authority"."£16.8m this year, and including the bailout last year, that means £10,000 a day in interest payments, £10,000 a day that city taxpayers are paying," he said opposition councillors understood that key services had gone through a transformation and needed extra financial support, but Labour had assured them it would just be a "safety net"."But what's happened 12 months later? They've maxed it out," he said."And out of the £16.8m bailout, £2.8m will be for paying interest on the last bailout. If that's not a payday loan council, I don't know what is."Jane Ashworth, leader of the Labour-run council, blamed the current financial problems on austerity cuts by the previous Conservative government."The city council has been deprived of investment from the Conservative government from 2010 onwards, which amounted to reduction in spending power of about £95m a year," she said."That is something like £280,000 a day and now you have the audacity to throw at us the suggestion that we're increasing debt." This news was gathered by the Local Democracy Reporting Service which covers councils and other public service organisations. Follow BBC Stoke & Staffordshire on BBC Sounds, Facebook, X and Instagram.
BBC News
04-03-2025
- Business
- BBC News
Nottingham City Council confirms tax rise and budget cuts
Nottingham City Council has confirmed a maximum council tax rise and a series of met on Monday evening to confirm the authority's budget for the next financial will see the council's share of bills increase by 4.99% from April - the largest increase allowed by government without holding a local leader Neghat Khan said the authority was "getting its house in order" after years of financial problems. Among the £18m of savings for 2025/26 are reviews of several adult social care services, such as direct payments, "high-cost" care packages, and eligibility for largest savings, however, will be made through changes to some back-office functions, which the council said involved "new ways of working and operational efficiencies".It also said it received a better-than-expected financial settlement from central said the budget "shows the council is now financially stable and that we are working towards becoming financially sustainable"."We know that the people of Nottingham want a council that gets the basics right and delivers the best local services we can afford, whilst also looking ahead so that the city can reach its full potential," she order to set a balanced budget, however, the council has used more than £20million of "Exceptional Financial Support" (EFS) - a process through which it uses the sale of assets to fund day-to-day spending, which councils are not usually allowed to told the BBC she hopes the council will be able to balance its books without the need for EFS in two years' time. Demonstrators outside the meeting called for the council to use its reserves rather than make calls were echoed by former Sheriff of Nottingham Shuguftah Quddoos, who was suspended by Labour after voting against last year's told the meeting the cuts could "easily be covered by reserves" and said the authority would have "comfortably enough left over for unforeseen circumstances"."These decisions are not being made out of necessity. They are deliberate and political. The harm and damage are avoidable, and the people of Nottingham deserve better," she to her, deputy council leader Ethan Radford said using reserves would risk causing further financial issues in future years."What happens when the reserves run out? What happens when your suggestions put the vulnerable at risk? What happens when your suggestions close our services?" he was also announced on Monday that Quddoos has now joined the Green budget was welcomed by the commissioners who were brought in to help run the council last Commissioner Tony McArdle said: "The council has made significant strides in reversing their decline and starting to implement much-needed transformation."
