Rutland County Council is proposing to hike its council tax up by 3.99 per cent - the first increase in six years.
The cabinet is proposing the council increases the tax to mitigate the impact of major cuts in Government funding and growing demand on social care services.
People are now being given the chance to have their say on the budget before it is considered by full council on February 22.
Acting council leader and portfolio holder for finance Terry King (Con) said the money provided by the revenue support grant - the council’s main source of Government funding - will fall from £4.3m in 2015/16 to nothing by 2019/20.
Additionally, the council will have to pay an additional £960,000 to the Government from what it collects in business rates, and will face other proposed cuts. He said this was “far beyond what was expected”.
Because of this, Coun King said the budget was “set within an extremely challenging financial context”.
Coun King added: “The Government has given Unitary Councils like Rutland the power to increase council tax by 3.99 per cent in each year for the next four years and assumes we will act accordingly to raise revenue locally and close this funding gap. In Rutland this equates to an increase of £1.10 per week on the average Band D property.”
The Government’s funding allocations assume councils will raise council tax and levy an additional precept to fund the rising cost of social care – services provided by councils which look after people who are at risk or have needs due to illness, disability, old age or poverty.
People aged 65 and over are anticipated to make up a third of Rutland’s population in the coming years while the number of residents with serious health problems such as dementia is expected to exceed 10,000 by 2020.
Coun King added: “Through careful financial planning, the council is in a position where it does not need to take drastic action, such as wholesale cuts to services. Our proposed budget for 2016/17 is robust and balanced, albeit we are using reserves.”
“Over the medium term, the position becomes increasingly challenging and members must balance decisions between cutting local services and raising more revenue as central Government passes fiscal responsibility on to local authorities. The earlier the council takes action, the less severe this will need to be. However, any decision not to increase council tax or apply the social care precept would leave us with significant financial problems in years to come.”
In previous years the Government offered a council tax freeze grant to compensate those local authorities which did not increase council tax. This grant was one of the key factors behind Rutland County Council’s decision not to increase council tax but is no longer available under the new funding arrangements.
During 2016/17, the council’s net cost of services is estimated at £33.73m - only 0.78 per cent higher than the approved budget in 2015/16 of £33.509m. The council is planning to dip into its general fund reserves for 2016/17, using £853,000.
People can find out more during the consultation, which runs until Friday, January 29. Further information about how to take part is on display at the Council’s Catmose office and at local libraries. Alternatively, you can share your views online by visiting www.rutland.gov.uk.