Council Tax Decision

Money

A full meeting of Test Valley Borough Council on Friday, 22 February voted in favour of a small rise in Council Tax which would result in a Band D property owner paying an extra 10 pence per week. This would bring the total annual charge for a Band D property to £126.41 a rise of £5 per year. Other Council Tax bands will change proportionately. Just over 67 per cent of properties in Test Valley are in Band D or lower.

The Secretary of State for the Department of Communities and Local Government, Eric Pickles, allowed a special dispensation for low taxing authorities to increase Council Tax by up to £5 per year. This was in recognition that the 2 per cent ceiling on Council Tax rises, without the need for a referendum, discriminates against authorities such as Test Valley who held tax down in the past.

This small rise follows a two year freeze of Council Tax in the borough and still leaves Test Valley as one of the lowest taxing local authorities in England. The rise is necessary to maintain services and balance the Council’s budget in the wake of a 41 per cent cut in core central Government funding in four years. This percentage represents a
£3 million loss, with £660,000 still to come next financial year.

The Council has undertaken a vigorous savings drive to minimise Council Tax in the borough which has achieved efficiencies equivalent to £1 million a year since 2008 with a further £1.25 million expected in 2013/14. Despite this, in order to balance the budget, it is necessary to draw on the Council’s reserves to the tune of £400,000.

In presenting the budget Councillor Peter Giddings, Economic Portfolio Holder said:
“Budgeting involves an extremely difficult balancing act between maintaining essential services, and the financial health of the organisation. For the past two years, we have frozen Council Tax, but we must be aware that short- term decisions to freeze Council Tax have long-term consequences. We have the 16th lowest Council Tax in the whole of England and this means that we are more reliant than other Councils on Central Government funding.

“The Government has recognised the problems created by being a low tax authority and has made a special dispensation this year to allow those Councils in the bottom quartile to put up their Council Tax by £5. I am recommending that we do this. £5 is less than 10 pence per week on a band D property, but this will enable us to bridge the remaining budget gap and put us on a better footing to balance the budget over the medium-term”
.
He went on to recommend to Council: “A responsible budget that not only protects front-line services and our most vulnerable residents, but also ensures the continuing financial health of the organisation.”

The budget for 2013/14 includes complete protection for those currently in receipt of Council Tax Benefit, a freeze in all car parking charges and a commitment to continue free parking in all Council car parks after 4pm.

In seconding the budget Councillor Ian Carr, Leader of the Council said: “I realise in opting for this small rise in Council Tax, following a 2-year freeze, that there will be an impact on households, but we have sought to keep this to an absolute minimum. A Band D householder will now pay just £2.43 a week for Test Valley services. Many will see this simply as the charge for emptying their bins, probably our most recognised function. I hope they don’t take for granted the many other services we provide, such as parks, planning, environmental health, stimulating business growth and affordable housing to name just a few. So perhaps they might recognise it as quite a good deal for £2.43 a week and still one of the lowest in England and the second lowest in Hampshire.

“Despite the tough financial climate and the continuing need to leave no stone unturned in seeking efficiencies, the coming year will see us take forward a number of initiatives and improvements to maintain and enhance the borough. I remain determined along with my Cabinet colleagues and fellow councillors to stay focussed on the corporate priorities identified by residents, business and community groups; a competitive local economy; enhancing and preserving the natural and built environment; improving access to a decent home and encouraging communities to reach their full potential.”

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