Unveiling the settlement today, communities secretary James Brokenshire offered the council an additional 2% council tax flexibility to overcome the “serious issues” it has faced.
Brokenshire’s written statement on Tuesday means the council can increase its council tax by 5% in 2019–20 to mitigate its ongoing financial troubles.
The embattled council had previously planned to increase its council tax by 2.99% for 2019–20 – the maximum increase before a local referendum must be held on the decision. Northants had estimated that this 2.99% increase would raise £3m over the course of the financial year.
Welcoming the flexibility, council leader Matt Golby said: “This now needs to be discussed, initially by the Conservative group and then by cabinet before a final decision is taken at February’s cabinet meeting.”
Brokenshire said the flexibility could be used to “assist with the improvements to council governance and services after their serious issues.”
He noted: “Many local authorities called for referendum limits to be removed. However, I believe the proposed limits allow local authorities to retain the flexibility to raise additional resources locally to address local needs, whilst protecting households from excessive increases in council tax, in line with the government’s manifesto pledge.”
Elsewhere in the settlement, Brokenshire confirmed several announcements made in the provisional settlement drawn up in December.
He said that core spending power would increase from £45.1bn in 2018–19 to £46.4bn in 2019–20 – a cash increase of 2.8%.
A total of £410m announced in the autumn Budget will be shared between adult and children’s social care services and will be distributed according to the existing adult social care relative needs formula.
Brokenshire also pointed to the £56.5m councils will receive to deal with Brexit across 2018–19 and 2019–20.
Other aspects of the provisional settlement that were confirmed by Brokenshire:
- Government will eliminate negative revenue support grants using forgone business rates;
- The new homes bonus baseline for growth will be maintained at 0.4%;
- A further 15 pilots will be launched with 75% retention of business rates.
Gary Porter, chair of the Local Government Association, reiterated the umbrella group’s view that councils face a funding gap of £3bn this year.
He added: “The money councils have to provide local services is running out fast and there is huge uncertainty about how they will pay for them into the next decade and beyond.
“The upcoming Spending Review is absolutely crucial for councils. If we truly value our local services then we have to be prepared to pay for them.”
Labour’s shadow local government secretary, said: “This announcement means more cuts to our councils, more struggling families without the services they need, and an inflation-busting increase in council tax with no end in sight for austerity.”
