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Southwark council tax could rise by almost four per cent to cover near-£7m deficit

Council tax could rise by 3.99 per cent in Southwark to make up some of the near-£7million deficit the council faces, writes Grainne Cuffe, Local Democracy Correspondent.

Southwark council has published a one-year draft budget which involves £420,000 cuts to waste services, including job losses, community sports, highway maintenance and the closure of Aylesbury day nursery in Walworth.

The cuts and possible rise in council tax – still only a suggested option – have been put down to an “extremely uncertain” financial outlook as a result of the Government’s “’one year only’ spending plans,” the delayed social care Green Paper, and in general a £146 drop in funding since 2011.

Speaking at the cabinet meeting on Tuesday, Councillor Victoria Mills, cabinet member for finance, performance and Brexit, said the authority had tried to look at a three-year planning process but it had “proved incredibly difficult because of the huge uncertainty”.

On the possible council tax hike she said: “I think it’s fair to say we haven’t taken that decision but I’m not convinced we’re going to find £6.8 million out of savings between now and January.”

Although the Government is yet to confirm how much finance councils will get for 2020 -21, delayed by the general election, Southwark has estimated a provisional total income of just over £362 million which, after spending and cuts, would leave a deficit of £6.8 million.

The report said: “In the context of pressures on council finances, the resilience of reserves and the continued year-on-year reductions in spending power, council tax remains a key source of income for the council.

“An increase of 1.99 per cent in council tax amounts to £2,255,000 income. This is one of the options that it will be necessary to consider to close the budget gap to protect services.”

The council is also proposing to apply for the Government’s discretionary two per cent adult social care precept, which would raise a further £2,267,000.

People living in Band C properties and below – who make up 60 per cent of residents in the borough – will see their bill rise by 38p per week – £19.76 per year, according to the proposals.

Those 12,000 who receive support through the local council tax relief scheme (CTRS) will pay “no more than 8p extra per week” and the 6,900 pensioners eligible for the council tax reduction scheme would not be affected.

Cllr Mills said: “Despite the Spending Round being at the more optimistic end of our planning scenarios and continuing, though plateauing, growth in homes and the local economy, a budget gap of £6.8 million remains.

“Unlike government, the council is legally required to set a balanced budget so officers have been asked to continue to work to explore whether any further revenue income can be prudently included in the budget and scope for any further income and savings across departments.

“Cabinet in January will need to consider these alongside the outcome of the local government finance settlement and the option of a council tax increase.

“A council tax increase of two per cent for adult social care would yield £2,267,000 and a 1.99 per cent general increase, in line with the government’s funding assumption, would yield a further £2,255,000.

“Together these would reduce the overall funding gap to £2,284,000.”

Cllr Mills added: “On a more positive note, the council’s budget proposals contain commitments of £19,505,000, including an increase in children’s and adults’ budget of £11,899,000.”

The draft budget is set to go to cabinet in January and to council assembly in February.

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