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Andy Street plans £8m council tax hike for West Midlands

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Andy Street (Con) has unveiled plans to raise an extra £8m for the West Midlands through council tax - the first mayor to present proposals for a precept.

Under budget proposals released today, Mr Street has outlined plans to add the equivalent of an extra £12 a year on a Band D property.

Legislation allows five of the six mayoral combined authority mayors to raise a precept to help fund their functions. Only the West of England CA mayor does not have these powers as local leaders prevented such a clause from being included in the region’s devolution deal agreement with the government.

Communities secretary Sajid Javid said last month that he was letting mayors set their own council tax precept level this year rather than being subjected like individual councils to a threshold for increases above which referendums are required. At the time Mr Javid said: “I’m sure voters will be watching closely to ensure this freedom is not abused – as I will.”

In an interview with LGC, Mr Street said he believed his proposals would be acceptable to the public and the seven constituent members of the combined authority – if two thirds oppose the mayor’s plans they can force him to change them – not least because those councils’ annual CA membership fee will be reduced.

“I think it will be accepted by the general public in the West Midlands,” said Mr Street. “They want to see value for money, of course they do, and they want to see modest sums – and this is a tiny amount in relation to total council tax bills – but they are also understanding that we do need to invest to improve our transport.

“Provided we do invest wisely and deliver what we say we will do, the feedback I’ve had from all of the public opinion surveys suggests the West Midlands is ready to stand behind public transport investment.”

The majority of the proposed precept – about £10 per Band D household – will raise about £7m in 2018-19 which Mr Street said will go towards capital expenditure in “congestion busting transport work”. Mr Street said this includes “ringfenced funding” for improving cycling schemes, investment in park and ride sites, and funding some “preparatory work” to improve bus services.

The remainder – about £2 per Band D household – will raise about £1m which will help fund the operational costs of the mayor’s office. Roughly half of the £1m will pay for about 10 members of staff in Mr Street’s office. The remainder will help fund “critical” policy work, said Mr Street, as well as various commissions including the mayor’s mentoring scheme and the homelessness taskforce.

LGC understands the Tees Valley CA will not be raising a mayoral precept, funding the mayor’s functions instead through its £15m a year investment fund from the government.

Mr Street said: “It would be very easy to fund our activity through the gainshare agreement but we have deliberately not done that because we want to protect it so we can borrow against it and maximise our potential going forward.”

He added the precept will raise “a tiny proportion” of the CA’s £500m investment in capital projects across the region.

Meanwhile, Mr Street said the West Midlands CA’s total £178m revenue budget for 2018-19 is “marginally down” on this financial year.

One of the biggest changes within the budget is the fact roughly half of the CA’s non-transport costs are now provided by additional funding coming through the second devolution deal. Mr Street said that has allowed him to reduce CA membership costs to the constituent authorities.

Funds have also been freed up so the CA can bolster its housing and skills teams, he said.

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