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Liverpool Echo
Liverpool Echo
David Humphreys

Mayor urged to avoid council tax hike to close budget gap

Changes to council tax increase limits “doesn’t bring any reassurance” to cash-strapped Liverpool Council according to the city Mayor.

As part of the wide ranging Autumn statement announced by Chancellor of the Exchequer Jeremy Hunt yesterday, the UK Government will allow local authorities like Liverpool to increase their council tax by 5% each year from April 2023 without the need for a referendum. The government said this will give councils “greater flexibility to set council tax levels based on the needs, resources and priorities of their area, including adult social care.”

Under the current rules, councils need to hold a referendum if they want to increase tax beyond 3%, which includes 2% for general spending and 1% on social care. On Wednesday, Liverpool Council announced its proposals to plug the “horrific” £73m funding gap it needs to fill to balance its books.

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In a statement to the ECHO following the Autumn statement, Mayor Joanne Anderson said: “The announcement does not bring any reassurance to us in Liverpool. Instead of fairly funding councils, they are pushing difficult decisions on us.

“Councils have already lost 60p out of every £1 since 2010. This is widespread erosion of public services.

“We cannot ignore the fact that councils do not benefit equally from council tax rises. The chancellor’s statement is another example of this Tory government letting our communities down.”

Cllr Richard Kemp, leader of the Liberal Democrat group, has called on the Mayor to resist the temptation to pass on further rises to ratepayers. In an email to Mayor Anderson, seen by the ECHO, Cllr Kemp said: “I understand that the rumours that were in place before the Autumn Statement are true and that the need to hold a referendum on council tax rises of 3% or above has been changed to allow an increase of up to 5%.

“I hope that you will agree with me that Liverpool cannot and should not raise council tax above the 3% threshold even if we can legally do so. You will be as aware as I am of the problems faced by so many of our residents who live just above the threshold for council tax relief and other benefits for whom this will be the last straw as inflation is 11% but average pay increases are running at approximately half that.

“Our unfair council tax system means that in Liverpool the very poor already pay too much towards the needs of the extremely poor. The cupboard is already empty in far too many households, and I look forward to hearing from you a pledge that you will not take advantage of this change and fall into the Tory trap of taking responsibility for their cuts.

“Please do not raise council tax by more than the 3% hitherto allowed.”

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