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City becomes first to rule out extra 1% council tax hike

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Manchester City Council has become the first local authority to rule out taking up Sajid Javid’s offer of raising council tax by an extra 1% next year.

However, three Conservative council leaders have told LGC they are considering making the increase to help fund services.

Elections will be taking place in Manchester next year with every council seat up for grabs. Council leader Sir Richard Leese (Lab) has decided to stick to the city’s previous plan of raising bills by 5.99% in 2018-19.

“Having agreed a budget on that basis, and with a large measure of public backing to increase funding to support adult social care, it would be a breach of faith with Manchester people to introduce a further increase on top of this simply because the government have moved the goalposts again,” he said. “An additional 1% increase would also risk having a negative impact on people in the city who are on lower incomes and already struggling to make ends meet.

“We will therefore remain true to what we said to the public last year and rule out adding an extra 1% to people’s council tax bills.”

The Local Government Association has calculated the extra 1% - announced in the local government finance settlement this week - will generate £250m of additional income, while LGC analysis has found £220m will go to upper tier councils.

Leading local government figures have criticised the move as they claim it fails to address long-term funding pressures.

However, three local authority leaders have already indicated to LGC they are considering taking advantage of the fact they can raise council tax by an extra 1% next year without triggering a referendum.

Colin Noble (Con), Suffolk CC’s leader, said all councils will need to consider how much extra funding it would bring in to the local authority and whether “philosophically we want to do that”.

However, the proposed pay deal for the majority of council staff will cost £1.8m more than what Suffolk has been planning for, said Cllr Noble.

“We have got to think about that,” he said.

Lincolnshire CC leader Martin Hill (Con) said “we will consider” raising council tax by an extra 1% while Paul Bettison (Con), leader of Bracknell Forest Council said it was “good that is now an option”. “We will consider the use of that along with any other tools anyone gives us,” said Cllr Bettison.

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