Saturday, 23 January 2021

Councillors want to raise tax but not bring down deficit

Councillors want to raise tax but not bring down deficit

RESIDENTS of Henley are facing an increase in the cost of services provided by the town council.

But this will not bring down the council’s deficit, which has grown despite a 13 per cent rise in the precept last year.

A meeting of the finance, strategy and management committee agreed to recommend a 1.1 per cent rise in the council’s share of council tax from April 1.

This, combined with an increase in the tax base, would bring in an extra £15,900, which would not prevent the deficit going over £200,000.

A report by council accountant Liz Jones said the draft operational deficit for 2021/22 would be £185,100, an increase of £83,700 on the current financial year.

But this assumed a five per cent increase in the council tax precept, which would bring in an extra £31,600 compared with last year.

Mrs Jones said: “If you increase the council tax by 1.1 per cent, then our precept would be £648,400, which is £15,700 less than I have assumed and the deficit will go up to around £200,000.”

She said the number of households had gone up by 81, which meant an extra £6,000 in income without any increase in council tax.

Returns on the council’s investment portfolio would come down by £20,000 to £150,000 and new housekeeping projects, such as new bins and grouting the pavements, were likely to be around £20,000.

A further £10,000 has been allocated for tree surgery and staff salaries assume an estimated increase of 2.75 per cent, representing £40,000 against the 2020/21 budget.

Councillor Will Hamilton, a member of the opposition Conservative group, said the council should balance the budget by using its reserves rather than raise the precept.

He said: “I fully understand the dire times around us and that our income is down because of that but I very much hope that we don’t have to put that burden on the taxpayer. We absolutely need a balanced budget and we can’t have what we’ve had in the past.

“If we work hard at the figures, we should be in a position this year, with covid, where we take some money from reserves and allow ourselves not to have to put up council tax. I think that is possible given the increase last year.”

But Councillor Ian Reissmann, a member of the ruling Henley Residents Group and chairman of the committee, responded: “What you’re saying is we should balance the budget but borrow from reserves, which is completely contradictory and impossible.

“We would have to find £200,000 worth of savings or increased income. You’ve made no suggestions how that should happen and you didn’t attend the value-for-money meeting when you were invited.

“If you want to make some concrete suggestions on saving £200,000 then you will be able to speak. If you are going to make suggestions like ‘we should balance the budget and borrow money’ then that isn’t helpful.”

Councillor Stefan Gawrysiak (HRG) said it was a “difficult time” with extra pressure caused by investment income going down and salaries going up.

“Over time we will bring the budget into balance and we have a duty to do so,” he said.

“A 1.1 per cent increase means that each householder in Henley will be paying an extra £1.19 per year per household, so we are actually being very modest.

But Councillor Hamilton is right, we’ve got to make a commitment to look for savings going forward.”

Councillor Reissman said: “We don’t want to run a £200,000 deficit — that is not desirable and we need to make sure that is reduced significantly over the next couple of years, or removed completely.

“Doing that now would be very unwise. The shock of covid is affecting everyone and if we were to take £200,000 out of the town that would just kick it while it is struggling.

“We do need to make sure that we pursue a comprehensive spending review and look at other areas of savings.”

The average band D household pays £108.52 a year at the moment.

This recommendation will be considered by the full council when it sets the budget in the new year.

• The committee approved a £5,000 grant to Headway Thames Valley, a brain injury charity, which had to close its centre in Greys Road from March to September due to the coronavirus pandemic and expects its income to be down by a quarter this year. It has been unable to see clients face-to-face for much of the year.

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