Windsor and Maidenhead council tax to increase by 9%
The Government has blocked a request for them tio rise by nearly 25%
Plans to increase council tax by almost 25 per cent in Windsor and Maidenhead have been blocked by the government.
The Royal Borough of Windsor and Maidenhead (RBWM) applied to the government for permission to raise council tax by 24.99 per cent – 20 per cent higher than the usual cap. It said that without the large increase it could go effectively bankrupt.
But the council announced on Monday, February 3, that the government would limit the increase to just under 9 per cent instead.
Liberal Democrat council leaders said the refusal would ‘force’ RBWM to borrow more to avoid going bankrupt this year – and mean more large increases in the future.
Unsustainable
A Liberal Democrat statement said: “While this will be more affordable for residents, it means that RBWM’s financial situation will not improve this year.
“This is because RBWM will still need to spend the equivalent of the originally proposed 25 per cent increase and will now have to fund the difference by further increasing our borrowing.”
“The effect of this will be to increase our debt and consequently increase our borrowing cost in the coming year and beyond. This situation is unsustainable.”
The statement added: “This decision from Labour defers the full resolution of the council’s financial situation to the future.
“This will necessitate further above cap increases in future years, increases debt and creates a massive financial burden on residents in the future.”
Rising costs
Liberal Democrat and independent council leaders say decisions by previous Conservative leaders to cut and freeze council tax have cost the council some £30 million a year, leaving it unable to deal with rising costs.
They have said that without a 24.99 per cent council tax increase, the council would have to effectively declare bankruptcy.
This would involve issuing what is known as a ‘section 114 notice’ which means declaring that it cannot fund a basic level of services.
Doing this often means the government then appoints commissioners to take over the running of council services.
A Royal Borough spokesperson said the council had felt a 24.99 per cent increase was ‘necessary’ and would have to ‘consider’ what the refusal means.
The spokesperson said: “Recognising that only by increasing council tax and reducing the reliance on borrowing will the council become financially sustainable our ask, to raise council tax by 20 per cent above the current cap of 4.99 per cent, was on the scale of increase necessary to set our budget following years of cuts to council tax from 2010.
“We will consider what this means for us while we also await an outcome on the other part of our government support request, a loan which will need to be paid back over several years and which we will need to adjust given our council tax increase is less than we needed – ahead of us having a fuller picture of our budget position for the next financial year.”