Question mark over whether Lancashire council tax will go up by five percent

Lancashire residents will have to wait until next month to learn whether the county council plans to increase council tax by almost five percent from April.

Thursday, 14th January 2021, 8:05 pm
Updated Friday, 15th January 2021, 1:02 am

The authority’s finance officers recommended that cabinet members put the proposed hike to County Hall’s annual budget meeting in four weeks’ time.

However, Conservative leader Geoff Driver instead suggested that the recommendation should be noted, but a decision on any proposal for an increase deferred until nearer budget day itself to allow for consideration of “all the factors”.

The full council will have the final say when it votes on whatever figure is ultimately put forward. Residents in the standalone Blackpool and Blackburn council areas would be unaffected.

County councillors will decide next month what will happen to council tax bills across Lancashire from April

The government announced last month that top-tier local authorities like Lancashire County Council will be permitted to increase their share of council tax by up to 4.99 percent – with three percent of the total being ringfenced for adult social care. That element of the bill is also allowed to be spread over two years should councils so choose.

Cabinet members were presented with an update on the authority’s coffers which revealed that the forecast financial gap by 2023/24 now stands at £53.9m, down from £78.7m back in November. The change reflects the government’s provisional finance settlement for councils, which was published shortly before Christmas and is now being consulted upon.

That means County Hall is unlikely to receive final confirmation of its funding until early next month, something which director of finance Neil Kissock described as “not particularly helpful” in the face of budget preparations.

County Cllr Driver also warned that it might be “a little bit early” to make a firm council tax proposal.

“It’s clear that the finances are in a reasonably healthy position, notwithstanding the problems of Covid,” he added, praising the “tremendous team team effort” to reduce a budget deficit which stood at around £200m back in 2017.

The authority is also forecast to hold £159.4m in reserves by the end of the current financial year.

However, deputy leader of the Labour opposition group John Fillis cautioned against any eye-catching council tax pledges ahead of planned county council elections in May.

“If I take you back to 2012, [a previous Conservative administration] actually cut the council tax by two percent, foolishly, in an attempt to win an election – and it cost this council absolutely millions of pounds.

“I would hope with your decision not to put through the [proposed rise of] 4.99 percent today, you’re not looking to do the absolutely ridiculous thing that happened in 2012.

“And I’m sure you wouldn’t, because of your financial understanding of what the consequences would be, “ County Cllr Fillis said.

Shaun Turner, cabinet member for health and wellbeing, said it was right to “consider properly” any council tax rise, “because everybody has obviously been through a lot this year”.

The report to cabinet noted the “ongoing and unprecedented” uncertainty surrounding local government finance, which members were told had been exacerbated by the pandemic.

The document forecast additional demand for children’s services in the wake of the Covid crisis, while a small underspend in adult services was set in the context of various one-off government grants and a warning that any post-pandemic pressure in that area may yet be to present itself.

The increased cost of domiciliary care for adults with learning disabilities and the use of agency staff to cover sickness absence in residential and day care services were highlighted as particular challenges.

Neil Kissock also warned of the “big risk” posed by a forecast one percent fall in council tax income and no business rates growth in the coming year.

The councils’ savings programme has been dented by the pandemic, with little more than half of a £51.1m target on track to be delivered in 2020/21 and £24.2m already pencilled in across the next two years.

The reserves are currently sufficient to plug any budget shortfalls through until the end of 2023/24, but the cabinet report noted that did not “negate the need for a sustainable budget to be achieved”.

However, deputy leader Keith Iddon paid tribute to what had been achieved over the past four years, saying that he “didn’t think it was possible” when he joined the cabinet in 2017.

But County Cllr Fillis decried what he described as a failed Tory promise to “level up” the North.

“When you consider we had £600m cut out of our budget, where is the £600m back from this Conservative government? If we got that back, we wouldn’t have any financial problems at all.”

Cabinet member for economic development Michael Green pointed to a subject on the private part of the cabinet agenda as evidence of the government’s commitment to “significant investment” in the region. One of the items discussed in the behind-closed-doors section of the meeting was identified as “Housing Infrastructure Fund – South Lancaster Growth Catalyst”.

County Cllr Driver admitted that he found it "really frustrating" that the fair-funding review into local authority finances had been further delayed and that councils were receiving a one-year financial settlement rather than a multi-year package.

"The promised green paper and white paper on adult social care seem to have been kicked into the long grass again. However, we have to deal with the situation we find ourselves in," he added.