17:20 Friday 29th January 2016
BBC Radio Cambridgeshire
CHRIS MANN: It looks like council tax will be going up by 4% in Peterborough next year. It’s one of the proposals in the City Council budget, announced today. Despite facing a deficit of £24 million next year, the Council is maintaining that no services will be cut. Our Political Reporter Hannah Olsson has more.
HANNAH OLSSON: It’s a legal requirement that every council must present a balanced budget, and this year hasn’t bee easy. Councils are facing a significant reduction in the amount of money they get from central government, alongside an ever-growing demand on their services. Peterborough City Council has a £24 million gap in its budget for next year. The first half of savings were announced at the end of last year, and today we found out about the second half. Many councils including Cambridgeshire say they’ll have no choice but to cut services, but Peterborough City Council say they’ve managed to pull the political rabbit out of the hat and balance their budget, and still provide the same services they are at the moment. I asked David Seaton who’s in charge of finance at the Council how they’ve done it.
DAVID SEATON: We’ve done it through things like the benefits of growth that we’ve seen, the extra income from council tax, the extra income from business rates, our innovative ways of doing things. And we’ve talked before about our customer experience programme, what that can do for us, and also the joint working we’re doing with other councils, and the income we’re getting from that.
HANNAH OLSSON: As David mentioned there, the key reason that Peterborough is in a healthier position that other councils is that it’s had so much growth in recent years. Peterborough is the third fastest growing city in the UK, and with new homes being built and new businesses opening, the Council simply gets more money.
CHRIS MANN: Yes Hannah but even with that, the Council still needs to find an extra £24 million next year. So how are they going to do that?
HANNAH OLSSON: Well one of the ways they’re saving money is through some clever refinancing of the Council’s debt. They’ve already told us in budget part one how they’ll be extending the debt on their assets from 25 to 42 years. They’ve now said they’re also going to be making these debt repayments more like mortgages, so the rate of interest is higher, but means the repayment is the same over the whole period, which in short means they won’t cost them as much now. There’s also going to be some savings in their staff costs. They’ll be closing their office between Christmas and New Year, stopping all the automatic pay increases for around 20% of council staff, and changing the way their staff are paid for travel. And of course they’re also planning to raise money by putting up council tax by 4%. Councils always have the option of increasing tax by 2%, but this year the Government also said they could add on an extra 2% as long as this money is spent on adult social care. Earlier in the week we heard that Cambridgeshire County Council isn’t planning on taking the Government up on this extra 2% offer, but Peterborough is.
CHRIS MANN: So ratepayers will want to know just how much does this extra money, this 4% rise, work out at.
HANNAH OLSSON: Well for the average Band D property, the council tax increase would work out at an extra 87p a week. Now the Band D property is a benchmark people use when we’re talking about tax rises. But it’s worth saying that the average property in Peterborough is actually Band B, so they would see an increase of 67p a week. This rise would add up to an extra £2.4 million for the Council’s coffers, although as I said half of this will have to be spent on adult social care. At the moment these are all still proposals. The final decision will be made on 9th march following a public consultation.
CHRIS MANN: Hannah Olsson there with that special report. Well let’s bring in the Leader of Peterborough City Council, John Holdich. Evening John.
JOHN HOLDICH: (DELAY) … believe me after an introduction like that. She’s really understood it.
CHRIS MANN: Good. (LAUGHS) Well glad that we’re presenting the facts.
JOHN HOLDICH: Good.
CHRIS MANN: But you’re caught between a rock and a hard place, because you say that you’re not cutting any services, but you have to save money. Are you sure nothing is going to be cut?
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