Council tax hike mooted as Hackney faces £60m budget hole

"The coming years present a far greater challenge," says Hackney's elected mayor, Jules Pipe. Photograph: Hackney Council
The Town Hall faces a funding gap of £60 million over the next three years – even if it raises council tax by 2.5% per year.
Recent cuts to the council’s funding from central government, combined with Hackney’s failure to raise council tax in line with inflation for five years in a row, has placed the local authority in an invidious position.
The projected gap between what the council spends and what it receives is based on the assumption of 2.5 per cent annual increase in council tax over the next three years.
The recently-released Medium Term Planning Forecast shows that the council will have to make over £23m worth of savings next year (2012/13) to balance its books. A further £13m of savings will have to be made in 2013/14 and £23m in 2014/15.
It remains unclear, however, how the local authority will continue to deliver the services it provides on a reduced budget.
Mayor of Hackney Jules Pipe conceded that this would be difficult: “Hackney’s sound financial management means that we have so far been able to protect services from the impact of government cuts. Whilst we have had to adapt the way we deliver some services, residents should have experienced very little change.
“The coming years present a far greater challenge. There is no way of doing this without impacting on the services residents receive, but we have to focus on our priorities: supporting the most vulnerable residents, and ensuring that the borough remains clean and safe.
“We may have to do less but we need to concentrate on the quality of what we do, and on finding new and more cost effective ways to deliver those services.”
The council has initiated the process of identifying areas where cuts can be made. Discussions at a recent council meeting (5 September) indicated that adult social care may be one of the first areas to be targeted.
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Its great to read some reporting of Hackney LBC’s Governance & Resources Scrutiny Commission but I was under the impression that central government were offering financial inducements not to raise Council Tax and that the Citizen’s volunteer journalists were going to avoid frightening vulnerable Hackneyites by sticking in unexplained sentences such as ‘adult social care may be one of the first areas to be targeted’? The Monday 10 October meeting of G&R is going to be worth rocking up to just for the 21st Century Councillor Project agenda item alone.
@ Jed Keenan
Re your impression that central government is offering financial inducements not to raise council tax:
According to BBC News (03/10/11): “The government … is offering to give those [councils] that limit spending rises to 2.5% the money they need.”
– Ed.
@ Hackney Citizen
The current CPI inflation rate is 4.5% (and the RPI rate is 5%). Is the Chancellor stating that there is a maximum increase of 2.5% over the inflation rate or that there will be an inflationary decrease in taxation? If it goes up £25 per £1000 and you don’t get an annual pay increase that keeps up with inflation then that is a tax rise but if you do then it is an increase of £25 per £1045 and so a tax decrease. Or does he mean that local government will add 4.5% and 2.5% together and the then is the ceiling rate the Treasury will subsidise? If it goes up £70 per £1000 or £70 per £1045 then it’s a tax increase for the employees of both bad and good employers.
Do you know which is being mooted, is it inflation minus tax increase 4.5% – 2.5%, or inflation plus tax increase 4.5% + 2.5%?
Oh and I forgot to add that either way, it will be those that are most afraid that are first to be targeted by the Citizen.
Have you read the Richard Peppiatt resignation letter to Dirty Des?
‘…as much as the skill of a journalist today is about finding facts, it is also, particularly at the tabloid end of the market, about knowing what facts to ignore. The job is about making the facts fit the story, because the story is almost pre-defined.’