SLOUGH residents are set to see their council tax bill rise by an astonishing 9.99 per cent as the authority has its fingers crossed to be solvent in five years.
The ruling Labour Group that controls Slough Borough Council passed the 2023/24 budget that proposed the massive hike, which will raise an additional £3.2m in income, as well as £22.4m savings.
This means the council tax bill, which includes the fire and police precept, for the average band C household will rise by £154.08 this year, which is about £2.96 a week.
Of that 9.99 per cent, 7.99 per cent will fund council services, expand the local authority’s council tax reduction scheme, and reduce its £13.4m annual savings by £500,000. The remaining two per cent is earmarked to fund adult social care.
The town was just one of three local authorities in the whole country to be given dispensation by the government to raise council tax above the 4.99 per cent cap without holding a local referendum.
Speaking at the full council meeting on Thursday, March 9, Cllr Rob Anderson (Lab: Britwell & Northborough), lead member for financial oversight, said the local authority’s council tax base is “too low” for it to be sustainable, adding they raise less income from council tax compared with other local authorities.
The council effectively declared bankruptcy in 2021 after it racked up a £760m borrowing debt and a £357m deficit. Along with the council tax increase, it also plans to sell up to £600m of assets.
Conservative leader Dexter Smith (Colnbrook with Poyle) said residents are having to pay for the “cost of Labour,” labelling the tax rise as “unjustified” and “unacceptable”.
He said: “We have wards within this town which are amongst some of the most deprived in the country.
“To be coming to them at this time, which has been so painful in terms of Covid, lockdown, and then the bankruptcy of the council, to hit them with this council tax increase is just appalling.”
He called the budget the “disclaimer budget” to match the unprecedented audit opinion on the 2018/19 accounts.
The council is assuming it will potentially face nearly £13m in annual savings from next year until 2028/29 as opposed to £20m annual savings. If it pays off its £51.1m part in the Berkshire Pension Fund deficit, this could net the local authority about £5.5m in annual savings for the next 12 years.
READ MORE: Huge Slough council tax rise takes one step further
If it comes to fruition, the council has to save about £7m a year rather than what was originally predicted to be £20m of annual savings.
It is also aiming to balance the 2024/25 budget by this June in order to give itself breathing room to start ‘right sizing’ the council.
If things go according to plan, the council could balance its books in five years’ time without the need to use money from asset sales to plug its financial woes.
Cllr Anderson said: “I think we’ve surprised a few people with the speed and the efficiency and the scale of our financial improvement. And that includes me to a certain extent.”
He also said the council is planning to pay off all of its £266m of temporary borrowing it got from other local authorities by this September. He added the council will not have to sell off its essential assets and housing stock for the council to become solvent.
The council is aiming to shave £22.4m off its £143.3m revenue budget, which pays for day-to-day services. The biggest cut is £7.5m within the finance and commercial directorate followed by a £5.6m savings target in adult social care.
The council-wholly-owned Slough Children First company, which has historically overspent its budgets, has to make a saving of over £1m.
READ MORE: Cash-strapped Slough Council 'not sustainable' without huge tax hike
Cllr Anderson said the £22.4m savings were a “tough ask” but they went through the 2023/24 budget with a “fine tooth cone” and have been challenged by the government-appointed commissioners to make sure they are deliverable.
About £21m has been chugged into reserves, which were at £550,000 in 2021, to offset any unforeseen shock to its finances. However, given the council’s financial position, officers believe this should be doubled.
Within the five-year capital programme, a separate budget that funds one-off projects, it has been downsized to £102m to help fund the £10.4m cycle superhighway on the A4 and the £9.2m upgrades to Farnham Road.
The programme will mainly be funded through developer contributions, grant funding, and capital receipts. It will not be funded by any external borrowing.
Nearly £11m has been allocated to the council tax reduction scheme, which would see reduced bills for approximately 9,300 households on a low income.
The changes to the scheme will mean 5,357 current working-age claimants will pay less in council tax. Of these, 3,552 of the most vulnerable working-age households currently paying 20 per cent towards their council tax would not have to pay any this year.
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