EXCLUSIVE: Council tax could rise by four per cent in Highlands
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Proposals in brief:
- Council tax up by four per cent
- Commercial waste fees up by three per cent
- £20 million for roads and £1.2 million for rapid pothole repairs
- Doubling the basic rate of parking fees from £1 to £2
- Introducing 'invitation to pay' car-parking charges at 21 sites
Householders across the north are facing an eye-watering four per cent hike in council tax this year if Highland Council’s budget plans are agreed next week.
It would take council-imposed increases in council tax to a total of 10 per cent since 2019 in a move prompted to close the largest budget gap in years.
Alongside that are other potentially unpopular moves including the doubling of the basic parking fees from £1 to £2 and the introduction of “invitation to pay” car-parking charges.
In what will be seen as another blow to trade, it is proposed the cost of commercial waste collections goes up by three per cent.
Taken together with the parking charges and the 21 new 'invitation to pay' sites – traders will likely read the changes as anti-business.
Fears that roads investment would evaporate did not materialise – £20 million is allocated alongside £1.3 million for a dedicated pothole rapid repair team.
But that falls well short of the steady state – ensuring road surfaces are no better or worse than the previous year – which is now estimated to be above £30 million.
Temporary per hour rates for early learning and childcare (ELC) will remain frozen at rates agreed last October, after the administration caved-in to opposition demands.
Five-year shortfall of £126.9 million
But even with these changes, ongoing funding issues mean there is a “structural budget gap of £126.9 million” over the next five years with “by far the largest element” of £49.2 million falling this year, which with loans charges climbs to £54 million.
That was tackled by the council tax hike worth £5.3 million, budget savings worth £22.1 million, repurposing of council tax income from second homes and long-term empty properties worth £3.4 million and a massive use of reserves at £23.3 million.
The use of reserves – always seen as a last resort – indicates just how severe the financial crisis facing the council actually is along with the four per cent council tax hike – the biggest since the government council tax freeze was lifted.
The budget savings include: reducing waste £1.3 million; budget no longer required £6 million; service redesign/efficiency £7.9 million; removal/reduction in services £3 million and revenue generation £3.1 million.
The council is not financially sustainable
The budget setting was delivered in perhaps the worst possible circumstances both internally and externally for years after both the chief executive and the executive chief officer for finance departed the council, leaving both roles filled with interim placements.
The very experienced Kate Lackie stepped into the chief executive role and the respected Ed Foster took over the finance remit.
Mr Foster oversaw the budget setting – a highly technical job – to make sure the political wishes of the administration aligned with its statutory obligations amid what is the worst financial crisis since regional local authorities were founded.
The need to try to stabilise the finances has affected every aspect of the budget though locals are unlikely to shed any tears for the council or the difficult choices that have had to be made.
Mr Foster summed up the situation: “It is the view of the chief financial officer that the council, in its current form and model of service delivery, is not financially sustainable over the medium term.”
He added: “Nevertheless, if the council is to bridge its budget gap over the medium term, significant service savings will be required.
“These cannot be delivered by transformation, efficiencies and new ways of working alone – the council may have to reduce or completely withdraw from certain areas of activity, regardless of their local importance.
“The council will need to work extensively with its partners, citizens and communities to help mitigate the impact of these reductions.”
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