Wigan town hall bosses to recommend first council tax rise in 7 years to plug £25m gap
Because of the pandemic the council is currently forecasting that savings of £25m will be required in 2021/22.
Finance bosses are expecting a rise in council tax for Wigan residents for the first time in seven years as the town hall tries to tackle a £25m shortfall.
Senior council officers say that government grants will plug some of the gap but an increase in council tax has been factored into the latest calculations.
Councillors will ultimately set the rate at the annual budget meeting next year.
But Wigan council’s assistant director of finance Tony Clarke told a scrutiny committee on Monday that officers will ‘probably’ recommend the rate rises.
He said: “We’ve shied away from council tax rises for six, seven years at least now.
“We’re at a position where, whilst it’s not a good time for people, it’s the right time. If we were going to increase, it is the right time to increase.”
Strategic finance manager Jane Green told councillors that the council’s budget should be in a balanced position by the end of the financial year.
But because of the pandemic, the council is currently forecasting that savings of £25m will be required in 2021/22, up from an estimated £9.7m in March.
The budget shortfall is made up of £8m in income losses, £10m in social care pressures and £1m in other services. It also accounts for £6m due to inflation.
Mr Clarke said the financial settlement from the government will ‘definitely’ reduce the council’s budget gap – but based on what has been announced so far, he believes there will still be a ‘significant’ financial shortfall next year.
The town hall is expecting to have a ‘firm idea’ of what its budget gap will be by the middle of January after the government announces details of its grants.
But council tax rises are ‘built into’ the government’s figures, Mr Clarke said.
The finance boss said his department will determine how much the council tax increase should be depending on how much of shortfall remains in the budget.
He added: “I’m not saying that means we’ll do a council tax rise, because that obviously is up to cabinet and up to full council to do that.
“But as officers we’d probably recommend that there is a rise for next year.
“At what level, that would be entirely for members to debate.”
Local authorities can only raise the general council tax rate by 2pc each year – but the ring-fenced adult social care precept can rise by a further 3pc.
Councils are required to hold a referendum if they want to raise the rate higher.
There are no limits on the precepts set by Metro Mayors, which in Greater Manchester are set by Andy Burnham for the police, fire and other services.
However, Mr Clarke said he would be surprised if the Mayor raises his part of the council tax bill when he sets Greater Manchester’s budget in the new year.
He said: “I’d be surprised in the current climate if it increases next year. But that’s my guess at the moment.
“The mayor will set his budget, it’s usually the end of January when it goes to the GMCA leaders’ committee to make a decision.
“But the mayor’s under a lot of pressure at the moment from the 10 councils because of our budget pressures, so I would be surprised.”