WAKEFIELD Council will need to make further budget cuts of more than £12m during the next two years after the government announced plans to change its funding system.
The council has already slashed £41m from its budget since 2010 and was aiming to save £54m by 2014/15. But changes to the way authorities are funded – including providing lower grants to councils who implement a council tax freeze and changing the way business rates are distributed – mean Wakefield Council will lose a further £12.2m.
And council bosses say the changes are yet another “blow” to the local authority which will now have to find savings of £66m.
Council leader Coun Peter Box said: “This is fundamentally unacceptable and unreasonable. Not only is this government yet again making further cuts to the money we need to provide essential and major public services, but it is not giving us any time to make the plans to deal with this.
“These extra cuts are being announced less than six months from when they will impact on services.”
Council bosses estimate they will lose £7.5m in 2013/2014 and £4.7m in 2014/2015 as a result of the changes, which are to be enforced next April.
During the last two years the council received a government grant equivalent to increasing council tax by 2.5 per cent – but under the new system they will receive just one per cent if they choose to freeze it for another year.
Councils which refuse the grant offer will be restricted to raising council tax by two per cent and forced to hold a referendum for any increase above that level.
Councils will now also retain a proportion of the business rates income which they collect locally and receive a smaller amount of grant funding through a government grant.
A spokesman for the Department for Communities and Local Government said: “The new reforms deliver an opportunity for a £10 billion boost to the wider economy over the next 7 years, and more business rate revenues for councils to support frontline services. Councils will have a strong incentive to go for growth, pay off the deficit and still protect vulnerable communities.”
Regarding the council tax freeze, Communities Secretary Eric Pickles said: “The Coalition Government’s council tax freeze has cut council tax in real terms over the last two years. A third-year’s freeze will mean the combined effect is potentially worth over £200 to Band D residents. Freezing bills again will really help hard working families and those on fixed incomes, such as pensioners with their cost of living.”