Penryn council tax may rise or services could suffer after council hit with £7,000 rent arrears bill
PENRYN residents face an increase in council tax or they could lose local services such as the toilets following an error by Cornwall Council which left the town with a sudden and unexpected rent arrears bill of almost £7,000.
Penryn Town Council rents Saracen House, its office building, and Permarin cark park from Cornwall Council.
Both leases allow for annual rent increases but Cornwall Council has neglected to advise the town council about the rises for the last four years, since the transfer of the contracts from Carrick District Council.
Since then, the town council has been paying the same rent, but the debt has been slowly increasing without its knowledge.
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After seeking legal advice, Penryn Town Council believes it has no choice but the pay the back rent bill of £6991.
Town clerk Michelle Davey said that it is awaiting to hear if Cornwall Council would allow it to pay the debt over two budget years.
“We are talking about adding almost £3,500 to the budget each year,” she said. “We will have to increase the precept to pay for it, or it will have to come out of the reserve.
“Whichever way we look at it something has got to give.”
The precept is the amount which town and parish councils receive from Cornwall Council each year, which determines the level council tax charges.
Ms Davey added that if the bill is not passed onto the tax payer, local services could suffer.
“If we decided to let the toilets close, for example, that would be roughly the same amount to pay for it.
“It is going to have an impact either way, all because somebody neglected to do a rent review.
“Everyone makes mistakes, but I would have thought that if we made a mistake we would pay for it. Ethically it is their mistake and they should have to pay for it.”
The town council’s estimated spend for the current financial year up to April 2014 is £248,000.
A spokeswoman for Cornwall Council said: “Both leases allow for rent increases (to a formula) from 2007 which Cornwall Council did not action until the omission came to light in August 2013.
“Cornwall Council has calculated that just over £6,900 is now due in back rent. Cornwall Council acknowledges the difficulty this will cause and will work with Penryn to alleviate the negative impact.
She added that a meeting between officers from both councils was due to be held this week to discuss the issue.