Lancashire County Council sets out surprise council tax plan

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Lancashire County Council is planning to put up its share council tax bills by less than it had originally intended this year.

The authority’s deputy leader, Alan Vincent, says that its finances have improved sufficiently to be able to give residents “some relief from [the] upward pressures” on household budgets as the cost of living crisis continues to bite.

County Hall’s preparations for its own budget on Thursday had, until now, been based on an assumption that it would raise the council tax rate by the maximum 4.99 percent permitted without the need to call a local referendum on the issue.

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However, County Cllr Vincent - who is also the portfolio holder for resources at the authority - told a meeting of the cabinet that the county council was now in a position to limit the increase in bills from April this year to 3.99 percent.

County councillors will debate the state of the authority's finances this weekCounty councillors will debate the state of the authority's finances this week
County councillors will debate the state of the authority's finances this week

The government announced in November that local authorities would be allowed to hike basic council tax by three percent, with an additional so-called “precept” of two percent available to councils - like the county authority - responsible for delivering social care.

“We would like to do more, but…we believe [the proposal] to be a prudent means of helping the public whilst not endangering public services,” County Cllr Vincent said.

Council leader Phillippa Williamson added that no decision to raise council tax was taken "lightly”.

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The recommended rise will now be put to a meeting of the full council when members set the budget for 2023/24 this week. The lesser proposed increase has resulted in a widening of the forecast deficit faced by the county council council in three years’ time, which has risen from the £15.5m expected last month to £23.3m.

However, that figure remains a fraction of the £160m black hole for 2026/27 that was predicted back in October. That prompted an £84.2m savings plan - agreed by cabinet a month later - which will form the basis of the forthcoming budget. A longer-term strategic savings target of £34.2m was also set.

County Cllr Vincent said that a more generous than expected government funding settlement for the year ahead and additional social care funding had helped ease the immediate pressure.

“We take a cautious but nonetheless mildly optimistic view of the future prospects [for] this council and our ambition is to drive costs down further, help tackle inflation where we can and offer as much direct and indirect support to our residents as we prudently can.

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“However, [we are not] at a stage where we would want to risk huge amounts of spending. But I think if the government's policies on reducing inflation [and] interest rates…are successful, then there is every possibility that our assumptions are too cautious and perhaps [we can] look at the situation again at a later date,” he added.