In these cash-strapped times, it was good news for council taxpayers in Cornwall when Cornwall Council announced, back in February this year, its plans to freeze council tax for the next two years.
Good news indeed but how was this going to be achieved when Cornwall Council like every other local authority in the UK were looking for ways to seriously slash its expenditure and increase revenue?
It’s all due to a financial incentive from Central Government - if a local authority froze the level of council tax paid out by residents, it can claim 2.5% of the total council tax collected. This Government subsidy is worth almost £6 million pounds to Cornwall alone.
Unlike Cornwall Council, Central Government does not subsidise Parish and Town Councils whose main source of funding is limited to only the Precept (funds collected from parishioners via council tax) and applying for grants for specific things e.g. the new play area at Lovell’s Park has been paid for entirely from play grants and not from the Precept. However, Parish Councils being local government can often be excluded from applying for many types of grants.
Sadly, Parish and Town Councils all over the country are experiencing increases in their expenditure as the costs of the services they provide go up. As the current Government is pushing through its Big Society plans, it is inevitable that more and more will be devolved to Parish Council level - we have seen this already with Cornwall Council passing responsibility of grit bins and public toilets downwards. With no Central Government subsidies, Parish Councils have no choice but to rely on the Precept to ensure that the parish is not left without.
Be warned though, it is likely that Cornwall Council will increase council tax for financial year 2013-2014.
