The final local government settlement has given Northamptonshire County Council the ability to raise council tax by an additional 2% without holding a referendum.
The council had already proposed raising council tax by 2.99%, the maximum amount it could do before holding a local vote.
The final settlement stated: “For 2019-20, the relevant basic amount of council tax of Northamptonshire County Council is excessive if the authority’s relevant basic amount of council tax for 2019-20 is 5% or more than 5% greater than its relevant basic amount of council tax for 2018-19”.
When classified as “excessive”, a local authority must hold a referendum on its proposed tax hike.
In November, in a bending of the rules by the government, Northamptonshire was given permission to use £70m of capital receipts to help balance its budget.
The final statement otherwise largely confirmed what was contained in the earlier provisional settlement in December, with core spending power rising by 2.8% in cash terms from £45.1bn in 2018-19 to £46.4bn in 2019-20.
In real terms this is almost a freeze.
The Bank of England in its most recent quarterly Inflation Report, released in November, said: “CPI inflation is projected to be above the target [2%] for most of the forecast period [the following three years], before reaching 2% by the end”.
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The latest CPI figure for December was released on 16 January, showing prices rose by 2%.
The Local Government Association reacted to the final statement by repeating that it believes councils will face a funding gap of more than £3bn in 2019/20.
“The money councils have to provide local services is running out fast and there is huge uncertainty about how they will pay for them into the next decade and beyond.
“The upcoming Spending Review is absolutely crucial for councils”.
Other details which were confirmed in the final statement were that the government will cover the £153m cost of negative support grant, there will be 15 more business rate pilots with a retention rate of 15%, and the new homes baseline for growth will be maintained at 0.4%.
