Cash-crunch Cornwall Council plans 2% tax hike
A rise in council tax is the "only option" if people are to receive "a full range of services", the leader of Cornwall Council has said.
Jim Currie, who leads a coalition of Conservatives and Independents, spoke out as draft proposals for the authority's budget for 2013-14 were outlined for the first time.
The council said it was on track to make savings of £41 million this year – following cuts of £86 million in the previous 12 months – mainly through "efficiencies and management savings".
But it said recent changes in council tax rules, new responsibilities in areas such as welfare reform and council tax benefit meant the council now had to find an additional £6.4 million in savings over and above the £24 million target set for 2013-2014.
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Councillors are now being asked to consider increasing council tax by 1.97% – an increase of 47 pence a week, to £1,268 a year, for a Band D property.
Councillor Currie said: "Although we have protected frontline services from the impact of the disproportionately large cuts in our Government funding over the past two years by increasing efficiency and restructuring services, the combination of the continuing economic recession, further funding reductions and the costs of additional responsibilities means we are now being forced to consider increasing council tax levels for the first time in two years.
"The budget proposals already require all services to deliver further efficiencies to cover the costs of inflation and changes in legislation.
"We appreciate that many people are already struggling to pay their bills but the scale of the financial challenges we are facing means that increasing council tax is the only option if we want to continue to provide a full range of services for people in Cornwall.
"Some people have suggested that we should use our reserves to balance this year's budget. While this might seem like an easy option, the facts are that we will need this money to prevent cuts in future years. We are already planning to use some of our reserves in 2013/14 and 2014/15.
"Using this one-off money to fund ongoing expenditure now will mean we are still faced with finding more than £13 million of alternative funding or making significant reductions in services in 2015."
The cabinet is due to discuss the draft budget next Wednesday before it is sent to other committees.
The final decision will be made by full council on February 26.
Councillor Jeremy Rowe, leader of the Liberal Democrat group, said the Conservatives had not kept council tax low or protected services. He said the party's record was one of "wastefulness and indecision".
"It was the Liberal Democrats who last year took the lead in proposing a council tax freeze whilst the Tories dithered and their Independent bedfellows backed a steep rise," he said.
"It is the Liberal Democrats who have campaigned to save local services, forcing the Conservatives to back down on plans to cut bus routes and close libraries."
He added: "As we approach the council elections in May, it is increasingly clear that Cornwall needs shot of this failed Tory administration and to see the Liberal Democrats take charge to guarantee the services that Cornwall relies on."