A FIVE per cent increase in the Council Tax precept has been proposed by Morpeth Town Council.
The above-inflation rise has been suggested by the council’s Finance and General Purposes Committee to help cover a £41,000 loss of grant support.
The grant is a compensation payment for a reduction in the council tax base due to housing benefit changes, which is passed down from the Government to Northumberland County Council.
Last year the county authority in turn passed it on to town and parish councils, but has indicated it will not do so this year.
Committee Chairman David Parker said: “There is no doubt about it that a combination of a Government decision about something quite different, the knock-on effect on the tax base and the county council’s response is why we are in the situation we are in.”
The committee has proposed reducing the council’s budget for repairs and maintenance and using money from balances to plug the gap, but with additional financial commitments planned such a £5,000 for the Morpeth Markets Partnership, guarantees for a community transport service and additional funding for the Morpeth Town Team, it says the precept rise is unavoidable.
“If we are going to fund the council’s budget as proposed then in order to do that we need to increase the precept by five per cent,” said Coun Parker.
“I’m aware that other town and parish councils are doing similar things.
“We also need to know that the Department for Communities and Local Government, although it is not intending to use its powers to cap town and parish council precepts in 2014/15, there is an implication that it might well do that in the following year.
“If we don’t take that into account, we could find ourselves in real difficulty next year.”
Coun Parker said the town authority is undertaking a radical review of all of its services and staffing structure, which could identify more efficient methods of working for the future.
Coun Andrew Tebbutt said: “A lot of what we do and the way we do it has been historic and this is unique opportunity for a new council to look at the way we do things and make sure we do them in the most effective and most efficient way for the 21st Century.”
He added: “For a long time, Morpeth Town Council stood out with its precept being way ahead of the other councils. We are now no longer ahead and we are behind several others. I have no problem with that at all, but we need to make sure that we have enough money to deliver what we believe is right for Morpeth.”
Coun Nic Best said: “I’m happy with this budget as it stands. The precept is up five per cent, but the compensation we are losing represents eight per cent so we have a three per cent reduction in our budget even though households are paying more.
“I think the consolidation of the Town Team budget is a good move and I would like to see how that works.”
The budget proposals will be put to the full council for approval on Wednesday.