Nine per cent council tax rise approved by Shropshire Council
Shropshire Council has agreed to increase council tax by an unprecedented nine per cent.
The decision, described by some members of the council as a 'super rise', was agreed at a vote of the full council held at Shrewsbury's Guildhall today (February 26).
The 8.99 per cent increase means the average band D bill will go up by £162.42p, from £1,806.67 to £1,969.09.
The vote on the Liberal Democrat administration's budget was passed with 44 councillors voting in favour, 21 against and one abstaining.
The council had to be given permission for the rise by the Government because authorities can only increase council tax by 4.99 per cent in a year without a referendum, or the green light from Westminster.
The council tax rise comes as the authority was given the go ahead to borrow nearly £190 million from the Government to avoid bankruptcy.
Addressing the meeting Liberal Democrat council leader Heather Kidd said that without the large rise the council would need to borrow more - costing residents more money in the long term.
She said: "That extra four per cent council tax rise is really painful for all of us. We all have friends and family in this room that will have to pay that and many of them will find it really difficult."
But the council leader said that the authority had no option, due to the perilous state of its finances.
She said: "There has never been a more important time for us to set a budget that actually delivers because in the past when the budget had not delivered it was propped up by reserves. We have now got to the point where we have no reserves and we are funding it through borrowing."
She added: "We are now facing this huge hole in our budget. Our income from council tax, business rates, fees and charges, and the government grants simply do not match the money we have to spend."
Reform opposition leader Councillor Dawn Husemann said she understood the financial situation had largely developed under the previous Conservative administration, but that she was not convinced by the Lib Dems' plans for recovery.
She said: "We realise the current administration inherited this situation from the Tories who have been in power for 15 years and had run this council into the ground during that time."
But she criticised the lack of an "economic development plan or ambitious growth strategy", adding: "This administration has been in for 10 months and these outcomes need to happen a lot faster if this decline is going to be arrested."
She spoke of financial projections which show the budget gap increasing, not closing, reaching a potential £180m in the coming years.
Councillor Husemann also spoke of the "eye-watering" interest payments the authority will be saddled with on its government loans.
She said: "There is no evidence of a robust credible process capable of closing this funding gap."
"The emphasis remains overwhelmingly on savings and efficiencies yet it is clear the most easy savings have already been taken and most were one off, not recurring."
She also took aim at the previous administration's spending on consultants, and said the council's current cabinet would have to avoid repeating the same mistake.
She said: "When a council is borrowing £130m to stay afloat, wasting money on failed consultancy expenditure is indefensible."
She added: "We must make sure this waste of money does not happen again."
Labour group leader Rosemary Dartnall said the situation had been created through cuts from Westminster and poor management from the Conservatives locally.
She said: "We have seen capital spending on shopping centres we have overvalued and purchased at the top of the market, and £39m spent on the North West Relief Road. We have seen the gradual depletion of Shropshire's capital reserves and resistance to borrowing for invest to save projects."
She added: "The increase will be hard for many residents and we urge the council to guarantee there is sufficient access to benefits and targeted assistance for those who wont be able to afford such a rise in one go."
But she said she supported the budget, adding: "There is no alternative. It is a vital part of getting the council back on track."
Councillor Dan Thomas, leader of the Conservatives, said the financial situation had been driven by cuts from Westminster and defended his party's record.
He said: "Let us be clear, we are in this position because everyone agrees the government funding settlement is fundamentally unfair.
"This is not a failure in local management, it is a rural penalty imposed by Westminster."
He added: "Under Conservative leadership we provided restraint. In the previous decade when we froze council tax for several years we still added £18m to our reserves and focused on efficiencies while protecting residents and delivering essential services.
Duncan Kerr, leader of the Green Party, said the next year will be the "greatest financial challenge in Shropshire's history".
He said: "Shropshire council is one of 35 councils now needing emergency financial support this year. The system for local government funding is clearly irretrievably broken."
He added: "Many families in Shropshire who are already victims of the cost of living crisis will be dreading the council tax bill landing on the door mat. We need to move every stone to get help to them as soon as possible."
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