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Cabinet to consider 2018/19 Budget as Colchester Council faces continuing financial pressures

Date published: 23 January 2018

Budget includes:

  • A 2.75% rise in Council Tax, in line with the Government's assumptions, increasing by £4.95 the amount a Band D property will pay and raising £307k.
  • Revenue Support Grant cut by £645k (70%)
  • New Homes Bonus cut by £1.34m (28%)

Colchester Borough Council's portion of the Council Tax is recommended to rise for only the second time since 2010, as continuing government cuts are set to wipe more than £2m from its budget over the next year.

The 2018/19 Budget, to be discussed by Cabinet on 31 January and recommended to Full Council on 21 February, will be considered against the backdrop of continuing and increasing cost pressures imposed by government.

A reduction in Revenue Support Grant of £645k, next year, has been confirmed as part of the government's four-year settlement. In addition, the impact of reforms to the New Homes Bonus means this grant will reduce by £1.34m next year, with further forecast reductions of £1.3m in the following three years.

However, these cuts are not the only fiscal pressures the Council faces, which also include costs from inflation, pay assumptions, additional employer pension costs and revised income assumptions.

The 2018/19 budget recognises the need to generate additional income and make further savings in response to budget reductions - a large proportion of which are based on proposals to work more efficiently and to maximise opportunities to increase income.

Despite a continuing squeeze on the Council's finances, the budget proposes a number of recommendations to continue investment and spending in key areas. These include a proposal to allocate just over £1m to help deliver projects which support investment in Strategic Plan priorities, as well as those able to deliver income to assist with managing future budget pressures and which support communities.

Proposals to allocate £750k for the Northern Gateway sports project, £250k allocated to the Revolving Investment Fund and £147k on housing projects are also confirmed.

The budget report also reflects new capital investment proposals including £2.9m in respect of the acquisition of properties for use as temporary accommodation.   

Councillor Paul Smith, Leader of Colchester Borough Council, said: "There is no doubt the Council is facing some very difficult and serious financial pressures, as a result of the government reducing our funding.

"In fact, the cuts we face go well beyond the next financial year, which is why we are having to look at every option available to save money, generate income and continue to deliver on our promise to protect vital services, increase investment and create more growth in the Borough.

"Unfortunately this means that, for only the second time in eight years, in order to absorb even deeper government cuts and close the budget gap, we have had to increase our part of the Council Tax by 2.75%."