NHDC sees £1.1 million council tax windfall after price hikes for residents

North Herts District Council offices in Gernon Road, Letchworth. Picture: North Herts District Counc

North Herts District Council offices in Gernon Road, Letchworth. Picture: North Herts District Council - Credit: Archant

North Hertfordshire District Council brought in £1.1 million more in council tax during the first three months of this year than the year before, new figures reveal.

But the Local Government Association has warned that many councils are now beyond the point where rising council tax income can plug their funding gaps.

Ministry of Housing, Communities and Local Government data shows NHDC received £25.63 million in council tax between April and June this year.

This was £1.07 million more than the same time last year, a rise of 4.4 per cent.

That's roughly in line with the England average, with income from council tax increasing by 5.7 per cent across the country.

NHDC's executive member for finance Ian Albert said: "NHDC collects council tax on behalf of Herts County Council, Hertfordshire Police and Crime Commissioner, parish and town councils as well as an amount for our own spending.

"Of the total amount that we collect, approximately 76 per cent goes to the county council, 10 per cent to the Police and Crime Commissioner, 1 per cent to parish councils and the remaining 13 per cent is retained by the council.

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"Increases between years in the amounts that are collected are mainly due to inflationary increases in the rates of council tax and increases in the number of properties in the district.

"In setting the council tax for 2019/20 we forecast an increase of just under 0.8 per cent in the number of properties in the district.

"For the district council and the county council the allowed increase was 3 per cent and in response to declining funding from central government, both councils increased their share of the council tax by 2.99 per cent.

"The police and crime commissioner was allowed to increase their share by £24 - for a band D property - which is equivalent to an increase of just under 15 per cent.

"There are no restrictions on increases for parish councils, the overall average increase for this element was 5.7 per cent.

"Incorporating the increase in the Council Tax Base and the increases in rates, equates to just over a 4.9 per cent increase in the amount of council tax that NHDC would expect to collect compared to last year.

"This is therefore consistent with the £1.074m increase in the amount collected in the first quarter between the two years, which is actually only a 4.4 per cent increase."

Councils across England took in £9.07 billion through council tax in the three months to June - an increase of more than £486 million on last year.

On top of council tax, local authorities also receive funding through central government grants to help them run public services.

But a new parliamentary report from the Housing, Communities and Local Government Select Committee has warned that significant cuts to this government funding has left councils with no choice but to cut back on services.

"Local government has coped with a prolonged period of real-terms spending reduction which is without parallel in modern times," the report said.

"The current uncertainty for local government and the lack of funding for services must be addressed as a matter of urgency."

A spokesman for the Local Government Association added: "Vital local services provided by councils face a funding gap of more than £5 billion next year.

"Faced with severe funding pressures, many councils feel they are being left with little choice but to ask residents to pay more to help them try and protect their local services."

The boost to NHDC's council tax income follows an average hike of 4.1 per cent on residents' tax bills in April.

Council tax bills for a Band D property - the most common price bracket - in the area now stand at £1,802, up from £1,730 last year.

Average Band D properties in England will set residents back £1,749.88 this year - £78.42 more than in 2018-19.

The cost ranges from a low of £755.46 in London's Westminster, to a high of £2,043.20 in Rutland, in the East Midlands.

An MHCLG spokeswoman said: "Individual councils choose what level of council tax to set and if tax-payers are concerned they can reject excessive increases through a local referendum.

"We're providing councils with access to £46.4 billion in funding this year - a real terms increase on last year."

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