Council warns of 9% tax rise (From Free Press Series)

Council warns of 9% tax rise

A NINE per cent council tax rise and cuts in services could be introduced to balance the council's budget for 2005/06.

Torfaen council's cabinet has been told emergency spending curbs could be introduced if the council is forced to dip any further into its reserves.

Director of finance Philip Nash said the reserves, which the Audit Commission recommended should be at least £6 million, currently stood at just £2 million.

Cllr Marlene Thomas said: "We have been using reserves to facilitate in-year funding and we should not be doing that."

Mr Nash said there were two main factors which could lead to an increase in council tax of three times the rate of inflation: a poor settlement from the National Assembly and the fact that an increasing elderly population was putting pressure on the social services budget.

Funding from the Assembly, which makes up the majority of the council budget, is likely to rise in line with inflation to around 3.3 percent.

But Mr Nash explained that was enough to fund employee inflation (mainly wage rises) but nothing else.

Regarding the increasing burden on social services costs, the cabinet heard that in the current year, that department's budget has been propped up with funds from other departments.

"That is short term," said Mr Nash. "A medium to long term plan is needed."

He added that the council was on track to meet the current year's budget. Cllr John Turner said the report made "depressing reading" and a nine percent council tax increase was "extremely unfair to many of our residents".

He added that it was wrong that "we are getting used to these large rises in council tax".

A council spokesman said: "The council tax for 2005/2006 has not yet been determined and will not be known until March of next year. We use the nine percent figure as a working assumption to progress our budget calculations at this early stage."

Council leader Bob Wellington said: "I am sure we will come good before we present the final budget."