Dacorum people face tax rise in bid to save council £3.6million

Hemel Hempstead, Berkhamsted and Tring residents could face a council tax rise to help their borough council save £3.6million over the next four years.

Dacorum cabinet members met at The Forum, Hemel Hempstead, this week (Tuesday, October 18) where they discussed a report detailing a “high level” of uncertainty around how much the council can spend between now and 2026/27.

The cabinet heard the council will be able to balance its budget for the current financial year, but that savings are needed to even out revenue and costs in the medium term.

According to a report by Councillor Graeme Elliot (Con, Chaulden and Warners End), portfolio holder for corporate strategy, the bulk of these savings have been “identified” by council leaders – including a rise in council tax borough-wide by 1.99 per cent, which amounts to £5 on an average-sized Band D property.

But cabinet leaders still need to plug an £824,000 hole over the next four years.

Before any savings or council tax rises are given a final green light, all councillors will be invited to vote on the plans.

Cllr Elliot said: “The micro- and macroeconomic conditions seem to be changing almost daily.

“We have been a reasonably prudent council and have been able to balance all schemes that are coming through this year.”

Cllr Elliot added his medium-term financial strategy was designed to “future proof” the council as best as possible against the challenges which may emerge during the cost of living crisis.

The report detailing the need for savings reads: “There continues to be a high level of uncertainty over the medium-term outlook due to the government’s short-term funding settlements, delays in local government funding reforms, the post-pandemic period and the potential impacts of the cost of living crisis.”

It adds: “Some redistribution of central government funding as part of the Levelling Up agenda is anticipated, and this is likely to have a negative impact on Dacorum funding.”

The baseline funding which Dacorum receives from the Westminster government stands at around £2m, which the council expects will continue into 2023/24 but fall to £0.8m in 2024/25.

The report notes the authority collects around £110m in council tax but retains £14m, with the rest sent to other organisations such as Hertfordshire County Council and the Police and Crime Commissioner.

It also notes that the government funding model requires the council “maximises the revenue it can raise locally each year” and will award grant funding based on how well this is achieved.

Council administrators believe they must raise council tax by the “maximum permissible amount” to meet this government threshold.

The report reads: “As household budgets become more challenging, financially vulnerable residents in Dacorum may need to choose which bills to pay.

“Council tax could be perceived as less essential than utilities, food and clothing.

“If the council tax collection rates fall, this will impact the ongoing funding to the council in the medium term and lead to further funding pressures.”

Leader of the Opposition, Cllr Ron Tindall (LD, Adeyfield West) raised concerns around winter fuel prices and cost of living pressures into spring 2023.

He asked: “How hard-up are we to maximise benefits and support schemes at a time when everyone is under strain?”

Nigel Howcutt, the council’s chief financial officer, said a council tax support scheme is open to households which need it, and that the agreed tax rise is less than the rate of consumer price index inflation – which stood at 10.1pc in September.

“We do put residents front and centre,” Mr Howcutt said.

“Council tax will be one of the few bills coming in that does not increase astronomically.”