Bulwell households could face five per cent council tax rise next year as Nottingham City Council tries to pug £32 million budget gap

Nottingham City councillors are to meet next week to consider a set of new saving and income proposals which, if accepted, would deliver an initial £29 million towards re-balancing its budget gap for 2023-24.

But the overall budget gap is £32.2 million – with the current proposals leaving a further £3.2m of savings to be addressed by February.

The council had been on track towards setting a balanced budget next year but this was hit by the unforeseen rising inflation, fuel and energy costs and other pressures including a higher-than-expected nationally-agreed pay increase for council staff.

The budget is also being set in the context of a challenging employment market, increased demand for services and continued lack of certainty over future Government funding.

Councils are required by law to set a balanced budget each year – but the Government is not due to announce until later this month how much it will provide councils towards their costs for the forthcoming financial year.

The amount of Revenue Support Grant the council receives from Government has fallen from £126.8 million a decade ago to £26.7 million last year.

This is the equivalent of £694 less for every household in Nottingham.

The other main source of income is council tax, which the Chancellor announced in his Autumn Statement can now be increased by up to five per cent, including a two per cent precept towards adult social care costs.

And the council now says raising council tax has to be a serious option.

Coun Adele Williams (Lab), deputy leader and portfolio holder for finance, said: “Since 2010 we have had to make more than £300 million of savings to our budgets.

"With vastly diminished Government grants, we have got to seriously consider the five per cent council tax increase allowed by Government, even though this wouldn’t raise enough to properly meet local needs, and it would sadly place a further burden on local people who we know are already struggling with the cost-of-living crisis.

"For the vast majority of city residents, this would equate to between £1.25 and £1.46 more per week.

"When Nottingham households have lost out on average almost £700 of national funding since 2010, this rise is something we have been forced to consider."

Government announcements on adult social care funding are based on councils funding most of that by increasing council tax through the adult social care precept.

Eighty per cent of Nottingham’s homes, however, are in the two lowest council tax bands, reducing the council’s ability to raise funds this way.

Faced with this and increasing pressures on services, the city council has based its budget proposals for consultation on raising council tax by the full five per cent permitted under Government proposals.

It has also set out a range of savings proposals, involving a workforce reduction of 110 full-time equivalent posts.

These include changes to adult social care, reviewing fees and charges for parking, cremation and burials, leisure centres and cafes and stopping collection of household bins put out on the wrong day.

These proposals will be discussed at the council’s Executive Board meeting on December 20.