Council to ask for government approval to raise council tax to higher level without a local referendum

By Neil Speight

12th Jan 2023 | Local News

Monday's council
Monday's council

THURROCK Council is to write to the government to increase local council tax without triggering a vote from residents.

Local government rules say any authority wishing to raise its share of council tax above five per cent year on year must call a local referendum.

The government can waive that requirement and the Conservative administration that has steered Thurrock to effective bankruptcy is asking for it to do that following its financial collapse and a shortfall in its budget of hundreds of millions of pounds.

The Labour group and independent councillors on Thurrock Council say they oppose that - adding it is unfair to further to further penalise residents for the Tories' botched 'borrow to invest' strategy.

At an extraordinary meeting of Thurrock Council on Monday (9 January) a  report said the authority's council tax rate is 53rd lowest out of 56 unitary authorities in England, and lower tax income has been previously offset through commercial income.

However, the failure of Thurrock's commercial investment strategy has contributed to a £470 budget gap this operational year, and a further £184m deficit next year.

The shortfall has been caused by the failure of investments totalling £275m, and other blunders amounting to a loss of a further £129m from capital investments.

The council plans to sell assets, slash services and borrow more from the government but says it also needs additional revenue from residents.

Council leader Mark Coxshall has apologised for his party's catastrophic failure but says: "These are shocking numbers but the first stage to creating a good plan for recovery is to understand the full extent of the problem.

"We will have to request exceptional financial support from the government over a number of years to stabilise our financial position and give us time to have balanced budgets.

"Alongside this support we will have to use other levers including asset disposal, efficiency savings, council tax increases and funding flexibilities from central government to recover our financial position."

The report to Monday's meeting said: "Historically, this deficit has been ameliorated by income generated from investments, but this is clearly no longer a feasible strategy.

"To support financial recovery, members will need to support increases in council tax including a request to DLUHC for dispensation to raise council tax at a rate that exceeds the national referendum limit.

"It is likely that future government financial support will be contingent on an agreement to increase council tax."

A government spokesperson said ministers will consider any request for exceptional financial support from Slough or Thurrock carefully.

"Councils are responsible for managing their finances and we expect them to exercise restraint to protect taxpayers from excessive costs," the spokesperson said.

"We are making up to an additional £5bn available for councils in the next financial year (including the ability to raise council tax), so we can ensure they can continue to deliver vital services."


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