THE GOVERNMENT’S policies are “inflicting chaos” on Waverley Borough Council’s finances, a leading councillor has said.
The new health and social care levy will cost the equivalent of a 1.2 per cent increase in council tax, said the council’s portfolio holder for finance, and Lib Dem councillor for Badshot Lea and Weybourne, Mark Merryweather.
From April 2022, the Government is introducing a 1.25 per cent rise in National Insurance, to try to tackle a funding shortfall in the NHS and social care.
As an employer this will cost the borough council at least £130,000 a year, Cllr Merryweather said at an executive meeting on Tuesday (November 2).
He said he was seriously concerned about “alarming” predicted levels of inflation amid tight Government controls over how much a local authority can tax and generate income for itself independently.
Although the authority is now sharing senior staff including its chief executive with Guildford Borough Council in a bid to save money and protect front line services, Cllr Merryweather (Farnham Weybourne and Badshot Lea) said they will still need to identify more measures to balance future budgets.
He said: “Government policy seems to multiply the financial pressures we face.”
“It’s not just that our ability to raise council taxes and other income like fees and charges, however reluctantly, is either capped or heavily regulated by the Government. It’s also that the Government has heavily reduced or even eliminated entire chunks of our funding.
“So any threat of cost inflation, and especially above the national two per cent target, is a matter of grave concern.”
The Office for Budget Responsibility has predicted CPI inflation to peak at 4.4 per cent between April-June next year.
The provisional local government finance settlement for 2022/23, which outlines grants to local authorities and what they are allowed to raise themselves, is expected late December at the earliest.
For now, Cllr Merryweather said he expects “that the current cap on council tax increases will be maintained at the two per cent limit, which of course is less than half the forecast level of inflation”.
In addition, in last week’s budget Chancellor Rishi Sunak announced a 50 per cent business rates discount for companies in retail, hospitality and leisure.
While this may be great news for these sectors, business rates are a source of income for councils, and next year’s planned increase in the business rates multiplier has also been cancelled.
Cllr Merryweather said Waverley Borough Council only got to keep five per cent of business rates raised in its area anyway and he was anticipating this to fall further.
He said: “For us the trajectory remains that central government has no apparent intention to let Waverley Borough Council keep a single penny of whatever can be taxed on or through its businesses.”
He added they “hope for but cannot count on” a return to pre-pandemic revenue from their leisure centres.