Council Budget Plans Announced Including Lowest Increase in Council Tax for Three Years

Reading Borough Council is proposing a 2.99% council tax rise this year as part of its new three year budget plan.

The latest Medium Term Financial Strategy shows a more stable financial picture than in previous years. The proposed council tax rise works out as 91p per week for a Band D council tax payer. The proposed 2.99% rise is the lowest since 2016.

The council has found further efficiencies, increased income and made more savings to balance the budget and to help protect vital public services. Since April 2017, it has delivered more than £25 million of savings. Big challenges remain however. Over the next three years, it estimates it still needs to find another £24 million of savings and £6.2 million of income. The council will continue to focus on delivering the best possible services for the best possible value for money.

The Local Government Association (LGA) estimate that between 2010 and 2020, councils will have lost almost 60p out of every £1 the Government had provided for services (see notes to editor). In Reading, the Government has cut the amount it provides to run vital services by £58million, to nothing next year.  In the meantime, demand for services such caring for vulnerable adults, protecting children in need and preventing homelessness is increasing.

Despite this, the council is still finding ways to provide much needed affordable housing and new schools, improving public transport measures and building modern new leisure facilities, including new swimming pools, for residents.  The  capital programme – funded separately from the main budget – forms a key part of the council’s three year budget plan to ensure these much needed facilities are delivered.

Jo Lovelock, Reading Borough Council Leader, said:

“The council is now in a more stable budget position as a result of difficult decisions on savings and a huge amount of work. We are making better use of our buildings, increasing the use of technology and finding new ways to increase income. That includes making use of historically low interest rates to buy properties, which then creates additional income streams we can use to protect the vital public services that so many people rely on.

“Much progress has been made, but there remains a long way to go.  Government funding for Reading has been cut from £58 million since 2010 and there remains no  clarity on how the Government intends to fund local authorities from next year onwards. So while the Chancellor’s Autumn statement may have claimed ‘Austerity is Over,’ that is certainly not the case on the ground for Local Government.

“Councils are still being forced to make savings and increase income in order to balance their budgets and protect public services.  Nobody likes raising the Council Tax, but at least this year’s rise is  the lowest since 2016.

“The Local Government Spending Review offers the Government an opportunity to come up with a plan to properly fund local councils in the future. We can only hope they take it.  Councils are expected to make a three year plan, which we have done, but inevitably things will change next year when we finally see what the Government is planning.”

All the Berkshire Councils working together have again been selected by the Government for its business rate pilot. This year it means the council will retain 75% of business rates collected in Reading. 50% of the additional funding  will be passed to the Thames Valley Local Enterprise Partnership to fund key strategic infrastructure improvements which will boost the local economy. However this is for one year only and it remains to be seen what the Government’s longer term plans are.

The budget report therefore acknowledges the plan will need to be reviewed  when the Government announces the outcomes of the upcoming Local Government Spending Review, and when the impact of Brexit becomes clearer for Reading’s residents, workforce, public sector partners and the local  business community.

The council’s proposed capital investment programme for the period 2019/20 to 2021/22 is key to the council’s services and for the continuing success of the Reading  economy. It aims  to improve and modernise services and facilities across the town so that every resident can benefit.

The  capital programme is funded from a combination of successful bids for grants,  current cheap borrowing available to councils,  the Community Infrastructure Levy (CIL), which is the contribution developers are expected to make towards local facilities, infrastructure funding from the Local Enterprise Partnership and capital receipts, which are received when the council sells a building it no longer needs. This funding  is different from the money the council uses to run services and it cannot be used to pay for day to day services.

Highlights of the capital programme include:

  • £30.5 million on new and improved leisure facilities, including two new swimming pools
  • £75m to build new housing over the next 3 years from the Housing Revenue Account capital programme
  • £15 million on the new Green Park Railway Station and £10.4 million on priority bus lanes on the A33 to speed up journey times for all road users
  • £3.8 million on pothole, road and bridge repairs
  • £2.7million on parks equipment and other park improvements across the borough (£603k of which followed a public consultation last year on CIL funding. Other improvements will also include full consultation with park users).
  • Major capital investments for new schools, including the new secondary school at Richfield Avenue
  • £397,000 on traffic management and road safety schemes and £295,000 on school road safety schemes

Councillor Lovelock said:

“As difficult as the budget position has been, the council is committed to delivering real improvements for residents in the areas we know matter to them. Over the next three years, we will build new homes and modern new swimming pools and invest in new schools, better roads, modern playgrounds and new sustainable transport schemes to improve congestion and air quality in Reading.

“We are determined to ensure Reading continues to grow and prosper and that it achieves its full potential so that everyone can share the benefits of its success.”

The full budget report can be found at https://democracy.reading.gov.uk/ieListDocuments.aspx?CId=138&MId=1842

Notes To Editor:

The Local Government Association (LGA) this month launched a campaign to influence the forthcoming Spending Review by warning about the growing risk to vital local services if the Government does not take action to secure the financial sustainability of councils.

LGA Chairman Lord Porter said:

“The money local government has to provide vital services is running out fast and huge uncertainty remains about how councils will pay for services into the next decade and beyond.

“If the Government fails to adequately fund local government then it will be our local communities and economies who will suffer the consequences. It will be those who rely on vital adult social care to live independent lives, rural bus routes to get out and about, council tax support to ease financial burdens and those who value clean streets, green spaces and roads fit for the purpose.

“The Spending Review will be make or break for vital local services and securing the financial sustainability of councils must be the top priority.

“This is the only way to ensure councils can meet their legal duties to provide dignified care for our elderly and disabled, protect children, and prevent and reduce homelessness and protect the wide-range of other valued local services which also make such a positive difference to communities and people’s lives.”

For more information:  https://www.local.gov.uk/about/news/funding-black-hole

Oscar Mortali

For media enquiries about this release email oscar.mortali@reading.gov.uk or call 0118 937 2301