Council tax in Rother could rise again

Bexhill Town Hall
Bexhill Town Hall

Rother District Council could be set to increase its share of council tax again this year, according to a report to be considered by council leaders next week.

On Monday (January 13), Rother District Council’s cabinet is set to discuss a report on the authority’s draft budget for 2020/21.

While it is still early in the budget-setting process, the draft document assumes council tax will increase by the maximum allowed before a referendum – either £5 or two per cent, whichever is highest.

The assumed increase in council tax comes against a backdrop of an increase in the authority’s service costs and the complete loss of its revenue support grant from central government since 2019/20.

It also assumes increases in the council’s income from its investment and charges as well as savings, which come to a combined total of £1.3m.

In the report, a Rother council officer said: “The draft revenue budget shows an increase of nearly £161,000 in the cost of services over the 2019/20 position.

“As explained in the report, the budget includes a number of assumptions relating to income generation and savings, which if not delivered would result in an increased call on reserves.

“Members are aware of the actions officers are putting in place to deliver these, some of which will be difficult to deliver.

“The Government’s fair funding review and business rate reset coming in from 2021 add to the very uncertain backdrop to council funding for some time to come.”

According to the report, the council has seen significant increases in the costs of some of its services since 2019/20.

One of these increases comes as a result of the new joint waste contract which is set to rise by £876,000 in 2020/21. But this is to be partially offset by an increase in the annual garden waste collection charge (by £5), which will generate approximately £80,000 of additional income.

The council’s homelessness costs are also expected to rise due to increasing demand. The council plans to offset these costs in the long term by purchasing more of its own temporary accommodation. 

Other costs – including a two per cent pay rise for council staff and general inflation costs – will also have an impact on the council’s budget.

The report also warns of long-term pressures in the council’s financial position, particularly in its reserves which are currently forecast to fall to £6.7m by 2024/25. 

For context, the council considers the minimum level of cash backed reserves and balances it needs to be £5m.

Reserves currently sit at just under £14m, but the draft budget for 2020/21 plans on using £3.3m of this in order to meet specific costs. Of this £1.4m will be used to support capital projects, with the remaining £1.9m being used to support day-to-day spending.

This figure may increase if the council cannot increase its income or deliver savings to its targets during the year.

The report also warns of council income from business rates reducing from 2021 onwards.

A council spokesman said: “The significant falls in Government support will continue and the potential volatility in business rate income present a major challenge for the Council.

“The council needs to deliver its plans to deal with the continued pressures on its budgets but the changing nature and scale of those pressures mean that those plans need to be regularly refreshed in order to assess the impact on service delivery.

“To ensure a sound financial future for the Council, the financial strategy needs to be robust and current.”

After consideration by cabinet, the draft budget report is set for an in depth discussion at a meeting of the council’s overview and scrutiny committee on January 27. 

The final version of the budget is set to be determined and adopted in February. 

East Sussex County Council is also due to consider its budget around this time, with its share of council tax also likely to increase.