Council approves budget including £5 council tax rise

The proposed increase in South Staffordshire Council’s tax for 2024/25 will mean a bill of £140.34 for Band D households for the year.

The tax rise was passed at the latest full council meeting as part of the 2024/25 budget proposals and Medium Term Financial Strategy (MTFS). The MTFS covers the period from 2024/25 to 2028/29.

Council leader Roger Lees said: “The proposed MTFS sets out a three-year balanced budget until 2026/27, using General Revenue Fund reserves. The council has to make a number of key assumptions; the main ones to highlight are a council tax increase of £5 per year, business rates reset will happen in 2026/27 and business rate growth from West Midlands Interchange, ROF Featherstone and i54 extension are built into 2027/28.

“Business rates remain the largest source of funding for the council; the ability of the council to make use of General Fund reserves in the early years of the MTFS is largely dependent on us knowing what we are likely to generate in increased business rates from developments, such as the West Midlands Interchange, in future years. However the business rates reset could impact our ability to retain this growth and may also depend on whose developments are built out and occupied.

“The capital programme includes three new projects: car parking improvements, leisure centre equipment replacement and Streetscene and Baggeridge vehicles.”

Councillors were told that £1m had been set aside in reserves for the potential cost of temporary accommodation. This would be for residents facing homelessness.

Councillor John Brindle asked how this figure was calculated. Director of finance Rebecca Maher replied: “We looked at the current level of spend, produced different scenarios in terms of what might happen in the next 12 months and have gone for the mid-range of those scenarios.

“It is looking less likely that we will have to use that full £1m. But as it has been set aside in reserves, that means we can look at the budget again as the year goes on and see whether we can re-designate that reserve at any time.”

Councillor Penny Allen said: “I don’t know how many Ukrainian families we have in our district at the moment, but I am very well aware some have been made homeless because the residents who accommodated them can no longer afford to keep them. I’m wondering if that is going to increase our hardship budget?”

The meeting heard that there were currently 16 Ukrainian families currently living in sponsored properties in the district as a result of the ongoing conflict in their home country. The Government has extended sponsorship funding for another year and the district council had no immediate indications of anyone likely to become homeless, although families had previously approached the authority for help and received support.

A report to the full council meeting said the authority continued to face uncertainty on how it will be funded in the coming years. “The state of the economy continues to be volatile and provides a challenging environment in which to set the budget”, the report added.

“Although local government has largely recovered from the impact of Covid-19, some behaviours have changed in the long-term and this continues to affect some councils. There is also the cost of living crisis, exacerbated by the war in Ukraine and the potential impact of conflict in the Middle East.

“There continues to be significant levels of uncertainty around when the Business Rates Reset or funding reform will be implemented and what impact this may have. The intention of this will be for the baseline need for local authorities to be re-assessed which will affect the amount of Business Rates that the council is able to retain.

“This is a significant strategic risk for the council. Despite this uncertainty, the council is still required to prepare an MTFS and therefore must use several assumptions in doing this.”