More cuts loom after Osborne tax changes

COUNCILS in Oxfordshire may have to make yet more savings thanks to the latest Government changes to the council tax system.

For the past two years the Government has offered local authorities funding in exchange for freezing their council tax.

But now councils will be given three choices after an announcement at the Conservative Party Conference this week, which could leave them out of pocket.

They can keep council tax at its current level and accept a grant equivalent to a one per cent increase from the Government, make the maximum two per cent increase or hold a costly local vote on any rise higher than two per cent.

For Oxford City Council, where finance chiefs were hoping to increase council tax by about three per cent next year and in 2014 and 2015, it could mean a funding gap of hundreds of thousands.

Deputy leader and finance board member Ed Turner said: “This is heaping un- necessary pressure on councils. If the Government wanted to see council tax frozen it should pay for it properly, not indulge in this short-term posturing.”

He said the council had not decided whether it would take the one per cent deal or pursue a two per cent rise, but added: “We will cope with it as best we can.”

An increase of three per cent next year would have added around £330,000 to the council’s annual budget.

If the council accepts the deal, it will be out of pocket by £220,000 next year, compared to a £110,000 loss if it chooses the two per cent rise.

Oxfordshire County Council could be left with an even bigger hole in its budget.

This year, the council received a grant of £7.5m, equivalent to a 2.5 per cent rise in council tax.

But based on the same figures it would only receive £3m if it took the government’s deal in 2013.

County council spokesman Paul Smith said: “The council doesn’t set its budget until February, so proposals and decisions on council tax levels will be made in the new year.”

The 2.5 per cent grant was given to councils that chose not to increase council tax in 2011/12 and 2012/13.

Thames Valley Police Authority spokesman Candy Stallard said: “The precept will be set by the Police and Crime Commissioner when he or she is elected in November.”

Chancellor George Osborne made the announcement this week but stressed the Government was still trying to help local authorities.

He said the Government will set aside an extra £450m to help freeze council tax bills.

Comments (5)

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10:00pm Wed 10 Oct 12

Andrew:Oxford says...

Let the people decide!

Allow us to vote for 0%, 2.5%, 5%, or 10% increase in the council tax in the city. Only that way will the politicians, councillors and council staff know exactly what the people of Oxford(shire) want.

May even get a better turnout than local elections.
Let the people decide! Allow us to vote for 0%, 2.5%, 5%, or 10% increase in the council tax in the city. Only that way will the politicians, councillors and council staff know exactly what the people of Oxford(shire) want. May even get a better turnout than local elections. Andrew:Oxford

11:57pm Wed 10 Oct 12

gymrat34 says...

Andrew:Oxford wrote:
Let the people decide!

Allow us to vote for 0%, 2.5%, 5%, or 10% increase in the council tax in the city. Only that way will the politicians, councillors and council staff know exactly what the people of Oxford(shire) want.

May even get a better turnout than local elections.
That's a bit daft, the average person is not going to choose anything other than a 0% increase.
[quote][p][bold]Andrew:Oxford[/bold] wrote: Let the people decide! Allow us to vote for 0%, 2.5%, 5%, or 10% increase in the council tax in the city. Only that way will the politicians, councillors and council staff know exactly what the people of Oxford(shire) want. May even get a better turnout than local elections.[/p][/quote]That's a bit daft, the average person is not going to choose anything other than a 0% increase. gymrat34

1:02pm Thu 11 Oct 12

Andrew:Oxford says...

So what you are saying is, the average Oxford resident would be prepared to accept far deeper cuts in public services within the city than to pay more on their council tax?

Wouldn't that make things a bit difficult for the Unions? It's hard to march down a street protesting about the financial choices of the local electorate in a democratic vote.
So what you are saying is, the average Oxford resident would be prepared to accept far deeper cuts in public services within the city than to pay more on their council tax? Wouldn't that make things a bit difficult for the Unions? It's hard to march down a street protesting about the financial choices of the local electorate in a democratic vote. Andrew:Oxford

4:30pm Thu 11 Oct 12

paul from Kennington says...

If the council built homes, instead of wasting an average of £14,400 on Housing benefit to slum landlords per family, X god knows how many thousands in Oxford claiming, then that would save many £millions over the next 20 years and generate income instead of expenditure. Or is that too simple.
If the council built homes, instead of wasting an average of £14,400 on Housing benefit to slum landlords per family, X god knows how many thousands in Oxford claiming, then that would save many £millions over the next 20 years and generate income instead of expenditure. Or is that too simple. paul from Kennington

6:16pm Thu 11 Oct 12

Andrew:Oxford says...

paul from Kennington wrote:
If the council built homes, instead of wasting an average of £14,400 on Housing benefit to slum landlords per family, X god knows how many thousands in Oxford claiming, then that would save many £millions over the next 20 years and generate income instead of expenditure. Or is that too simple.
Well, I've always wondered if the people of Oxford were to lease the assets of the city to a major international entertainment group...

If we'd actually received a dividend rather than pay tax.

There would need to be an ethics board instead of councillors though...
[quote][p][bold]paul from Kennington[/bold] wrote: If the council built homes, instead of wasting an average of £14,400 on Housing benefit to slum landlords per family, X god knows how many thousands in Oxford claiming, then that would save many £millions over the next 20 years and generate income instead of expenditure. Or is that too simple.[/p][/quote]Well, I've always wondered if the people of Oxford were to lease the assets of the city to a major international entertainment group... If we'd actually received a dividend rather than pay tax. There would need to be an ethics board instead of councillors though... Andrew:Oxford

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