A POLITICAL row has broken out over Exeter City Council's plans to increase its portion of the council tax bill by four per cent.
Devon County Council – which accounts for the biggest chunk of the bills households will receive in April – has decided to freeze its share of the tax for the third year running.
But the Labour-controlled city authority is proposing an above-inflation rise. It would see occupiers of the average Band D property paying an extra £5 a year, taking their annual bill for city council services to £129.84.
Opposition councillors have criticised the sudden move to a four per cent hike. A report to the council in December had indicated a likely two per cent rise, which would have raised an extra £96,000. Conservative group leader Cllr Yolonda Henson also questioned why the authority turned down funding from the Government – equivalent to a one per cent increase – to help it freeze council tax again.
"It's quite appalling that they are doing the maximum increase," she said. "The money is there and they have rejected it.
"We expected two per cent and that was bad enough."
Liberal Democrat leader Adrian Fullam argued cuts in the council's Government grant would be counterbalanced by rising income via the New Homes Bonus scheme, which encourages house building.
"If you look at the grant plus the New Homes Bonus, the money the council receives is actually going up over the next four years, but the Labour party are choosing to allocate that to infrastructure projects," he said. "We are concerned about the costs of all the borrowing that's going on. That's why the Labour council sees a need to increase council tax by four per cent – it's not to enhance services or protect vulnerable residents who may be affected by welfare changes."
Most authorities have to hold a referendum on proposed council tax increases above two per cent, but because Exeter last year set the fifth lowest district council tax in the country, it has been allowed to opt for a bigger rise. Council leader Pete Edwards said: "Last year we froze our bills and for many previous years we have adopted a below-inflation rise in council tax. This has been recognised by the Government, who have allowed councils who set the lowest bills to make increases of £5.
"Government funding to Exeter has been severely cut again. We must increase council tax to protect essential services. Even with the increase, Exeter still sets one of the lowest district council tax levels in the country."
Cllr Ian Martin, portfolio holder for business transformation and human resources, said Communities and Local Government Secretary Eric Pickles had only recently signalled that Exeter could increase council tax by up to £5 a year. He added: "The New Homes Bonus scheme could be changed at any time and it's disingenuous to include it in the settlement equation. What we need to do is secure our revenue budget as best we can, and that's recognised by Eric Pickles by offering this opportunity of a modest increase."
Explaining the decision to freeze its tax, Devon County Council's Tory leader John Hart said: "The Government would have allowed us to put up council tax by two per cent, which would have brought in around £6m. If we freeze council tax we will receive a grant of £3m. Our judgement is that it is better to accept the £3m, continue our programme of making efficiencies and saving money and not have to ask residents to contribute more for our services."