Council tax rise and job losses

Luton Town Hall, George Street,
Luton Town Hall, George Street,

Council tax will increase by 1.5 per cent a year for the next two years in Luton and 58 council jobs will be cut.

Members of Luton Borough Council’s executive committee backed a report by Councillor Tom Shaw, acting portfolio holder for finance, to increase council tax and protect frontline services.

The council intends to decline a government offer of a grant to freeze council tax on the grounds that it would create a £1.65million hole in the council’s finances in future years. Head of finance Dave Kempson said: “From a purely financial viewpoint, a tax increase helps in the process of making the authority less reliant on government grant which is a key part of the council’s financial strategy. That is because the level of additional income it generates is greater than that achievable from accepting the tax freeze grant, which in turn additionally reduces the ongoing savings requirement. Nonetheless, if agreed, the budget proposals would enable Luton to again set the lowest council tax in Bedfordshire.”

The neediest people in Luton will not be impacted from the tax increase as the council tax support scheme will continue, despite the ongoing reduction in government funding to support it.

Therefore those people currently receiving full benefits will not be impacted by any tax increase.

The new budget will also include an extra £2million of spending to meet increased demand for adult social care services, particularly learning disability, mental health and long-term care packages.

£200,000 has been included to implement the Living Wage across the council’s own services.

Savings proposals involve the reduction of 58 jobs, 16 of which are currently vacant, ongoing benefits from renegotiated contracts, income generation and transforming how the council delivers its services. In the medium term, councils have been warned to expect further substantial reductions in Government grant until at least 2018/19.

Mr Kempson added: “Times undoubtedly remain tough, and particularly for councils such as Luton where property values are low and the council tax is below average, causing a greater reliance on Government grant.”