Worcestershire County Council plans to exceed 5 percent council tax increase
Exceptional financial support bid and tax increase could close £43.6m funding gap
Worcestershire County Council is proposing to increase council tax by more than five percent in response to a £43.6 million funding gap for the next financial year.
Cabinet members are also seeking exceptional financial support from the Government for the second consecutive year, which would allow the council to borrow and sell assets to fund operational costs.
Councils in England can raise council tax by up to five percent without Government approval; however, finance chief Rob Wharton and chief financial officer Phil Rook are preparing to request permission to go beyond this limit.
Despite this move, Cllr Wharton has previously said that a rise of 10 percent is “not actively being considered.”
The pressures driving the council tax increase
Cabinet documents reveal that pressures on adult and children’s social care have made the council’s previous policy of keeping taxes low “no longer sustainable.” Currently, Worcestershire’s council tax is lower than many comparable local authorities.
The council has already spent £12.6 million of its reserves to balance its books and forecasts that exceptional financial support of £33.6 million could be required by the 2025/26 financial year.
It has also reported £11.7 million in service overspending, partially offset by reduced borrowing and savings measures.
Government decision awaited
Worcestershire County Council’s cabinet is set to endorse the financial support request during their meeting on 18th December. A decision from the Government is expected by 20th February, after which the council must finalise a balanced budget.
Last year, the Government approved exceptional financial support for 30 councils in England, equating to almost 10 percent of principal local authorities, along with tax hikes exceeding five percent for six councils.