A rise in Council Tax is one option Bath & North East Somerset Council might have to consider following the Government’s latest announcement on a further reduction in local government funding.
Due to a change in the way the Government calculates how much funding it allocates to each local authority, the reduction in the level of grant received by Bath and North East Somerset is significantly larger than had been anticipated.
The Council has already been working towards finding £38 million worth of budget savings and new income over the next four years, as outlined in a recent series of public meetings.
However, as a result of the additional reduction in funding announced by Government, the Council will need to identify a further £3.6 million worth of savings in the coming year, over and above that already identified within the Council’s draft financial plan. These savings could either be in the form of further budget reductions within the Council or additional sources of revenue. Future years’ figures are still being reviewed in the light of the new funding formula.
Councillor Charles Gerrish (Conservative, Keynsham North), the Council’s Cabinet Member for Finance & Efficiency said: “Clearly this additional reduction in funding from central government, over and above that which we were expecting, makes an already difficult financial situation even more challenging.
“The settlement from Government means we will need to find a further £3.6 million in the coming year. To put this in context, a 1% rise in Council Tax is worth approximately £750,000 to the Council.
“We will therefore need to carefully consider a range of options to bridge this funding gap – including further savings across services as well as a possible rise in council tax, including the Government’s new levy to cover the increased costs for Adult Social Care.
“We remain committed to doing everything we can to protect front-line services as far as possible, and recognise the need for local councils to continue to play their part in reducing the national deficit and helping to bring the country’s books back into balance. However, the nature of this cut in funding, and the short time available to find the necessary savings, will clearly present a significant challenge.”
The Council is still looking at the detail of the Government settlement to identify the full impact, including the additional cost pressures in the care sector and rising demand for everyday services.
The Council aims to protect frontline services as far as possible by increasing efficiency, growing income and finding new and innovative ways of delivering vital local services.
Detailed budget proposals for 2016/17 are being developed by the Cabinet following the Government announcement on local government funding, and further details will be announced in due course, leading to a final budget decision by the Council in February.