There are 2 elements to the Council Tax increase for 2021/22:
- Core tax which can be increased by up to a maximum of 1.99% ( without a referendum)
- Adult Social Care (ASC) precept – up to a total of 3% over 2 years. ( This can be 3% in year 1, and 0% in year 2 – or split between the 2 years)
The Local Government Association Provisional Local Government Finance Settlement 2021/22 – ‘On the Day’ Briefing 17 December 2020 confirms the definition of the ASC precept as:
The money collected “must be used entirely for adult social care”.
The Tory Council’s declared Council Strategy as detailed in the Strategy paper from 17 July 2019:
The strategic direction in that paper was to increase the Council Tax by the maximum level possible for “good financial reasons”. This is particularly important, given that the Council has had to draw on reserves over the last few years to “balance the budget” and there is the well publicised shortfall in Adult Social Care funding.
For this coming year, 2021/22, the Council’s draft Medium Term Financial Plan/Budget (MTFP) proposes to increase Council Tax by 4.49% – not the maximum of 4.99%, contrary to the strategy. The rationale being :
This will save the average Council Tax payer £6 per year. Splitting it, will reduce the total tax revenue to the Council by ~ £0.5m
Free School Meals
At the Full Council meeting on 25th November a motion was passed that obligated the Council to implement comprehensive Free School Meal provision for qualifying children in the City, with immediate effect. The MFTP/Budget was approved by the Cabinet, for consultation, on 16th December 2020 – 3 weeks later, with no reference to the Free School Meals requirement.
A paper will be presented to the Cabinet on 13th January 2021 “Financial Support to Families during School Holidays” which is designed, in principle, to implement the Council motions of November 2020, however, it will funded by an increase in the Council Tax, by the “missing” 0.5% from the Adult Social Care precept – the core element is already at the maximum.
The crucial factor here is that 0.5% increase is from the Adult Social Care precept which should be used “entirely for Adult Social Care”, not free school meals for Children.
The Council may have balanced its budget…but is it legal?!
The Council is now in a mess!
I understand that the Tory Cabinet were advised to increase Council Tax by the full 4.99% but decided, politically, not to do so, for the December budget consultation. Had they done so, then this situation could have been managed better.
The additional 0.5% must be used to offset any planned cuts in Adult Social Care – the £0.5m for the Free School Meals must be found from elsewhere – presumably unplanned cuts in other services.
This does make a mockery of the Budget Consultation process!
Categories: Derby City Council