COUNCILLORS are likely to defy the government and raise council tax in Luton by 3.44 per cent when they meet next week.
Luton Borough Council has been offered a grant of £1.6 million if it freezes council tax for another year, but its accountants say accepting the one-off grant will mean it is left with a shortfall in its finances in coming years.
Not having the money from a rise this year to contribute to its base budget in coming years would mean the council would have to impose even bigger tax increases in the future, head of finance Dave Kempson said yesterday.
The authority needs to find nearly £16million of savings in the 2012/13 financial year, and the 3.44 per cent rise will bring in an extra £2.2million.
It will see people living in Band D properties paying an extra £39 a year to Luton Borough Council.
Officers have recommended that the council’s executive approves the rise when its members meet at the Town Hall on Monday night.
The authority says it is facing increasing costs from the number of children in care, adults with physical or learning disabilities, the elderly and the number of people claiming housing benefit, and that raising rates will mean it can protect services that help the vulnerable and elderly.
It will spend an additional £2million on care for adults, bringing its total spend in this area to £65million, and an extra £1.2million on supporting and protecting children, taking it to a total of £12.7million.
The council’s total budget is £152million.
Councillor Robin Harris, portfolio holder for finance, said: “The executive recognises how difficult any increase in council tax will be for the people of Luton.
“However, if the council was to take the money on offer from the government, it would leave us with a multi-million hole in the following year’s budget that would grow larger, to around £8 million over the next five years.”
“The government offered a one-off grant equivalent to 2.5 per cent on the council tax if we froze it for another year.
“I have looked at this offer very carefully but, having worked through the long-term impacts on the level of cuts we would have to make on services to the vulnerable, I am recommending that we cannot accept it.
“Taking this one-off payment would lead to the council having to make even more savings this year and an even greater increase in council tax in following years.”
Also included in the budget are nearly 200 job cuts, of which 63 posts are already vacant.
Lib Dem group leader David Franks said the tax increase would hit those already struggling.
“This is a typical situation where those who are reasonably comfortable probably won’t mind a small increase and those who are on council tax benefit probably won’t be affected.
“It’s the ones who are in the middle, with income just above the level where they can claim benefit, they’re the ones who will suffer.”
Luton taxpayers have been having their say on the proposals via Facebook and Twitter.
On Facebook, Luton mum Johanna O’Donoghue said: “We’ve gotta pay enough as it is let alone it going up again! Look for other ways to finding the cash is what I say.”
Bobby Presley said: “Cut the council bosses pay instead I say.”
On Twitter, Victoria Sweetman said: “Wow really unfair considering Luton is a really poor town... yet again those on benefits win.”
But Dave Mingay, NUT representative for Luton, tweeted: “It would allow the council to save so many essential services, so I agree with the rise.”
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