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June 17, 2024
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Blackburn with Darwen faces max rise in council tax

Cllr Vicky McGurk makes the prediction in her assessment of the authority’s finances, following Levelling Up Secretary Michael Gove’s December announcement of the provisional Whitehall cash grant to local authorities across England.

Her report to the council’s executive board on Thursday reinforces the warning given last month by borough leader Cllr Phil Riley, that imposing the full rise will be inevitable.

The rise will generate an additional £68 million for the council, with a core 2.99 per cent for general council tax and an extra two per cent for ever increasing adult social care costs.

Government grants to councils are based on the “assumption” by ministers in Westminster that councils will put up council tax by the maximum amount possible in the coming financial year.

The authority will make a final decision on the actual increase at its finance council meeting on February 26.

Cllr McGurk warned her senior colleagues that even with the full 4.99 per cent rise allowed without calling a local referendum the authority faces a cash gap of £6.4 million in 2024/25, and a forecast funding gap by 2026/27 estimated at £20.4m.

Her report reads: “Details of the provisional Local Government Finance Settlement for 2024/25 were announced on December 18.

“The government normally publishes the final settlement towards the end of January/early February.

“The provisional settlement represents the government’s view of the council’s funding position for 2024/25.

“It provides the government’s assessment of the council’s Core Spending Power (CSP) comprising funding such as business rates retained, revenue support grant, council tax and other grants payable to the council (examples include the social care grant and the improved better care fund).

“On the basis of the provisional settlement, the council’s CSP for 2024/25 will increase by 6.9 per cent when compared to 2023/24 and includes an assumption by government that councils will increase their council tax by the maximum allowable.

“This is in comparison to the average CSP for all councils in England of 6.5 per cent (meaning the council has the 24th highest increase out of 350 local authorities).

“The net change in cash grants payable to the council is £6.045m of which £5.024m is additional social care-related grants.

“The government has assumed that the council will raise £68.627m in council tax in 2024/25.

“This is based on the assumption the council will increase its council tax in line with the maximum allowable level. That is 2.99 per cent for general council tax and two per cent for the adult social care precept.

“The forecast funding gap for the period to 2026/27 is now estimated to be £20.4m with the most immediate issue being a gap of £6.4m in 2024/25.

“Further work is underway to firm up the council’s budget estimates and to develop options to bridge this gap.”

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