Page last updated at 14:08 GMT, Wednesday, 25 February 2004

'Why council needs 33% more tax'

By Steve Hawkes
BBC News Online

Council tax protest
Rising council tax bills have seen protests around the country

West Oxfordshire's director of finance Vic Allison has not slept for a week.

He lies awake worrying because every year his district council spends 2m more than it has coming in.

Mr Allison told BBC News Online the shortfall was in accordance with the council's long-term strategy - but the government has not read the script.

Local Government Minister Nick Raynsford is threatening to halt its plans to raise the council tax by 33% - the biggest proposed rise in the country.

The council plans to increase its part of the Oxfordshire levy from 60 to 80 for Band D properties in 2004/ 2005.

Mr Allison told BBC News Online it would remain the second lowest-charging council in the country despite the increase, of 20 on an average home.

Neighbouring South Oxfordshire District Council is planning a 2.7% rise, but people living in that area already pay on average 110 for its services.

I've had a week of sleepless nights
West Oxfordshire District Council director of finance Vic Allison

But it is West Oxfordshire that has received a letter from Mr Raynsford, warning it to lower its figures.

It follows his pledge to use capping powers on councils planning increases of more than 5%.

Mr Allison told BBC News Online: "Nick Raynsford looks only at percentages.

"Other councils have lower percentage rises but are asking for more cash."

West Oxfordshire will soon be setting a rate and sending bills to its 40,000 council-tax payers.

But if it was subsequently capped for raising its council tax by too high a percentage, it would have to send out another 40,000 bills - for the reduced amount - at an extra cost of between 20,000 and 30,000, Mr Allison told BBC News Online.

Spending slashed

It could cost the council as much again in lost interest, as it would be unable to pursue court cases for non-payment of the initial bills.

"I've had a week of sleepless nights," Mr Allison added.

West Oxfordshire was already planning to spend 900,000 less in 2004/ 2005 than in the previous year, he told BBC News Online.

Spending on planning, promotion, conservation, tourism, sport, the arts, cultural services and the Whitney museum had already been slashed, Mr Allison added.

Wiped out

These already "very painful" cuts "are getting pretty close to the statutory services we have a legal obligation to perform - paying benefits, planning applications, cleaning streets and emptying the bins".

But the 900,000 savings "have been wiped out by the extra cost of meeting government recycling targets alone".

"We also have 150,000 extra costs from increased national insurance payments," Mr Allison told BBC News Online.

Increased staff pension costs accounted for another 150,000, he added.

Sleepless nights

A new law allowing everyone aged above 60 to travel for half price on the buses removed another 100,000 to 200,000 from the council's coffers.

"We do not have a sustainable financial position," Mr Allison told BBC News Online.

Council leaders in West Oxfordshire are meeting on Wednesday to discuss the planned 33% rise.

If they decide to go ahead it could mean a few more sleepless nights for their director of finance.



SEE ALSO
33% council tax rise is discussed
25 Feb 04 |  Oxfordshire
Council defends 33% tax hike
18 Feb 04 |  Oxfordshire
Councils face tax rise grilling
18 Feb 04 |  UK Politics
Council tax 'could be replaced'
15 Feb 04 |  UK Politics
Council tax capping 'inevitable'
10 Feb 04 |  UK Politics

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