Cash-strapped Northamptonshire County Council expects the council tax hike will raise an extra £5.8m in the next financial year.
The £418m budget will be presented to the cabinet on Thursday next week, and also includes service cuts plans to save £41m.
Matt Golby, council leader, said: “Of course I do not take any proposals to increase taxes lightly.
“However, even after this increase we will remain one of the very lowest taxing counties in the country and given that it will mean we can invest or re-invest in areas people have told us are important, I believe it is the right thing to do.”
He added: “In the current financial year at one point our challenge to deliver a balanced budget stood at £64.2m. [Now] we are now within touching distance of achieving this.”
The budget proposals, released yesterday, mean council tax in the county will amount to an additional 75p to £1 a week for the 70% of residents living in properties within council tax bands A to C.
Children’s services will get the biggest slice of the £5.8m, receiving £1.2m for 2019-20.
Other allocations include £475,000 to permanently reinstate the previous winter gritting and winter maintenance of roads and £673,000 for independent adult social care placements.
Cuts to make up the £41m savings include to Northamptonshire adult social care (£23.1m), Children First Northamptonshire (£10.3m) - a council department formerly named children, families and education - and public health and wellbeing (£1.6m).
The council was handed a ‘lifeline’ in this year’s local government finance settlement when communities secretary James Brokenshire gave it permission to increase council tax by 4.99%. Usually any increase over 2.99% requires the council to hold a local referendum.
It was the first council for 20 years to issue a section 114 notice at the start of last year, which effectively meant it was bankrupt and could not balance its budget going into 2018-19.
Golby also said that the budget gap was now £1.4m, which was an improved situation from last month when the budget gap stood at £11m.
He added: “To be only £1.4m away from a balanced budget, with a strong confidence that we will be able to save the remaining sum is a true testament to the work of everyone involved in turning this council around.
“While we are very much on the right path we are still short and need to keep pushing forward to reduce this gap and end the financial year in a balanced position.”
Preliminary budget plans announced in December – before the council was given special tax-raising powers – planned to increase council tax by the maximum of 2.99%.
The budget will be debated by full council on 21 February and if passed it will take effect on 1 April this year.
