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Northants granted council tax flexibility in final settlement

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Northamptonshire CC will be able to raise council tax without a referendum by 2% more than other councils as it strives to improve its governance and services, the housing and communities secretary has announced.

Delivering the final local government finance settlement today, James Brokenshire also revealed the £410m social care support grant announced in the autumn Budget, which councils can spend on both children’s and adult social care, will be distributed using the adult social care relative needs formula.

However, today’s announcement was in the most part confirmation of proposals detailed in the preliminary settlement last month.

Mr Brokenshire in November granted Northamptonshire, which issued a section 114 notice last year, permission to use £70m of capital receipts to help balance its books after commissioners warned the council would not be able to set a balanced budget this year.

Now he has given the council further freedom as it attempts to place its finances on a stable footing. This means the council will be able to raise council tax by 5% without a requirement to hold a referendum.

He said: “I have also decided to provide Northamptonshire County Council with an additional 2% council tax flexibility, to assist with the improvements to council governance and services after their serious issues.

“Use of the flexibility will ultimately be a matter for the authority’s cabinet and full council.”

Mr Brokenshire admitted “many” councils had requested the removal of referendum limits on council tax increases during the settlement consultation.

He added: “However, I believe the proposed limits allow local authorities to retain the flexibility to raise additional resources locally to address local needs, whilst protecting households from excessive increases in council tax, in line with the government’s manifesto pledge.”

Mr Brokenshire confirmed the government will cover the £153m cost of negative revenue support grant and will distribute £180m of surplus business rates income to all local authorities based on need.

The new homes bonus baseline for growth will be maintained at 0.4%.

He also confirmed plans to create 15 more business rates pilots in 2019-20. These will pilot 75% rates retention, while areas with devolution deals will continue to retain 100% of the uplift in rates in their respective areas.

The rural services delivery grant - worth an extra £16m, rising to £81m - is to be maintained in 2019-20.

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Readers' comments (1)

  • Do we know roughly how much extra funds the additional 2% CT might raise? Very roughly I imagine its only around £8m, and wonder whether it really makes much difference given the scale of the debt and future liabilities ...?

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