Council tax unlikely to rise dramatically in Dorset next year
A report says big rises would be too difficult to collect.
Last updated 6th Oct 2020
Council tax payers in Dorset may not have to face the big increases feared from next year – with a recognition that it may be too difficult to collect.
Despite a predicted budget gap of £42m in the coming year, added to the £35m in the current year, the council’s early approach appears to rule out big council tax rises although a figure of around 2per cent is being suggested.
A report to today's (6 October) Cabinet says that while each 1per cent on the council tax generates around £2.5m for the council, it recognises that, due to hardship, it might not be able to collect it all:
“Raising council tax might well help balance the budget on paper but there will be a risk that we cannot collect the full amount or that increasing local taxes reduces the amount that residents can spend in the local economy and potentially damage local businesses.”
The council says the £10m savings generated on its pay bill saving by becoming a unitary authority will be dwarfed by the financial challenges it now faces.
Had it not received additional Government funding it would have faced a £64.2m budget gap this year alone.
Councillors heard today that the pressure will continue into the next financial year caused by a rise in need for adult and children’s social care as well as a rising number of complex cases.
“The challenge is further amplified by the uncertainties caused by the effects of the pandemic on Dorset and the wider national economy, and the impending exit from the European Union,” says a report to the Cabinet meeting.
'Potential savings'
The authority believes it may have identified just over £20m in savings for the coming financial year which begins in April – although these will come at a cost.
They include ‘income maximisation’, usually taken to mean increasing charges and fees; deleting vacant posts; reducing staff travel; reductions in training and development; reducing spending on leased buildings and ‘contract efficiencies’, squeezing better deals with suppliers and others.
The early look at budget planning makes no mention of job losses, a step which other authorities have already been forced to make, although each position which becomes vacant is being looked at in detail to see if it needs to be re-filled.
“The council continues to press the case for additional resources with Government…But campaigning alone will not deliver enough resources to meet all of our challenges and we must focus on reducing costs and growing income at the same time,” said finance corporate director Jim McManus.