THE Royal Borough’s leader said it is “not ideal” to raise council tax during a cost of living crisis as the government raises the levy cap.

Chancellor Jeremy Hunt said in his autumn statement that the government will give local authorities in England “additional flexibility” to change council tax levels.

Currently, councils can only raise council tax by 2.99 per cent without holding a local referendum. However, from April 2023, local authorities can increase this levy by five per cent (three per cent council tax and an additional two per cent for social care) without a referendum.

Speaking to the Local Democracy Reporting Service, Royal Borough Council leader Andrew Johnson (Con: Hurley & Walthams) confirmed they are considering raising the levy by the new maximum allowed at the 2024/24 budget.

He said: “I’ll be honest, it’s not ideal in the cost of living crisis. I think it’s very difficult to go back to council taxpayers and ask them for more money.

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“But for councils’ that deal with children’s services and adult services as well, we’ve seen some huge cost pressures coming through the system.”

The Royal Borough leader listed inflation, pay rises, contract inflation, service demand, growth pressures, and “significant cost pressures” in children’s services because of asylum seekers as pressures on the budget.

Cllr Johnson said they have pushed back releasing the draft budget to December 1 to “absorb” what Mr Hunt had set out, but they are “very, very close” to producing a “balanced and credible” budget.

He could not confirm if council tax in the 23/24 budget will rise by the current levy (2.99 per cent) but didn’t rule out “difficult decisions”.

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However, Cllr Johnson denied the council submitting a capitalisation direction request, which would effectively ask government if they could use capital money to be used for day-to-day services. This is usually funded by borrowing or asset sales.

“We remain confident that we are going to finish this current financial year (22/23) on balance,” the council leader said.

“I’m hoping we will finish with a very modest underspend and that will be carried forward to next year’s budget.”

“We are not in capitalisation territory,” he added. “We are not, at this moment in time, in section 114 [effectively declaring bankruptcy] territory.”