Cheshire East Council chiefs are set to raise council tax by no more than 4.99% – and hope they won’t need to take up an option to increase it by more, writes Belinda Ryan.
The government has indicated that local authorities, in exceptional circumstances, may be allowed to increase their council tax by more than the 4.99% capped limit.
A report to next week’s meeting of Cheshire East’s finance sub-committee states: “Where a council is in need of exceptional financial support and views additional council tax increases as critical to maintaining their financial sustainability, the government will continue to consider requests for bespoke referendum principles.”
But Council Leader Cllr Nick Mannion told the Local Democracy Reporting Service (LDRS): “It’s an option available but we’re hopeful we’ll not have to use it and we’re working towards remaining within the 4.99% maximum increase.”
Cllr Mannion also stressed 2% of the council tax increase is the adult social care precept and can only be spent on this.
He said social care costs had spiralled well above the inflation rate.
The report to the committee, from interim executive director of resources Adele Taylor, highlights the amount of council tax foregone because CEC accepted the tax freeze grant between 2011/12 and 2015/16 when it was Conservative controlled.
It states: “If we had increased council tax income to the maximum referendum limit every year then, by the time we get to the 2024/25 year, we would have had £35m more in council tax income for this year.”
CEC council tax is also lower than neighbouring Cheshire West and Chester (CWAC) where the current band D rate is £1,884.07, compared to £1,792.59 in Cheshire East.
The report states: “Council tax income in 2024/25 if using CWAC band D rate and CEC taxbase would equate to an extra £14.7m in 2024/25.”
CEC applied to the government in February 2024 for exceptional financial support (EFS) of up to £17.6m for this financial year, although it has not yet drawn down on that.
Last month it applied for up to £31.4m for 2025/26 – although, because the funding gap is now forecast to be £25.3m, the EFS required has been revised down by £6.1m
Conservative group leader Janet Clowes said with the council facing a shortfall of £25.3m over 2025/26 and a further projected shortfall of £21.3m in 2026/27 “it is therefore not surprising to see that one recommendation next Thursday, is that CEC finally draws down the £17.3m EFS requested from government”.
She warned this is not “free” money but a loan that will incur significant interest payments over lengthy repayment periods.
“The committee is therefore asked to consider an alternative set of scenarios where council tax is raised to levels that exceed the current limit of 4.99%,” said Cllr Clowes.
“The simplistic explanation offered is that CE council tax levels are lower than other similar authorities and so raising them to match is justified.”
With reference to the five-year council tax freeze grant under the Tories, she said Eric Pickles had honoured the election pledge at the time “to help control rampant council tax hikes under the previous Labour government”.
She added: “Next Thursday, councillors will be asked to consider which is preferable – the burden of long-term EFS borrowing or the up-front pressures of hiking council tax levels above the current 4.99% limit this year and maybe next year as well.”
The committee on Thursday will be considering and noting the issues and making recommendations to the corporate policy committee and full council.
A final decision on the 2025/26 budget and the council tax will not be made until a full council meeting in February.
“Hoping…”. “Spiralling costs…”. “Funding gap ..’. “working towards…”. “Significant interest costs ..”
Translation: They’re going above the cap.
As a pensioner, my YEARLY pension increase of 4.1% will be around £471.59 Therefore, putting in a proposed increase of 4.99% for council tax, will take my Band C over £2k per year, which equates to/in region of £9.50 per month extra I will have to find out my meagre £471+ yearly pension increase. On top of that I have an extra £6.00 to find for the green bin fee, plus all increases on utilities (Water, Gas and Electric). £120.00 gone from £471.59, just for council tax and green bin increase. The utility increases will wipe out the remainder and put me into a deficit. Two slight private pensions take me over the limit to claim anything (one doesn’t increase at all) and I pay tax on the combined amounts. WOW I AM SUPER RICH. AND Labour say pensioners who are not on pension credit are well off. Pity CEC doesn’t manage their funding more appropriately. I saw an article earlier this year on CEC Councillors claiming as much as £20k in fees on top of their wage, which is way more than I receive in retirement. DISGRACEFUL AND SHAMEFUL.
Any organisation in the private sector has to operate within budget. If you fail to achieve your detailed management performance agreement including all financial objectives, governance, compliance you will be be face capability and managed out and loose your job within the disciplinary process and procedure. I worked for a major financial player. I know how how failure was dealt with.
Explain how Cheshire East Council, Nantwich Town Council have this licence to waste tax payers money without any form of accountability.
I hope in the next set of elections for Cheshire East Council we some some radical changes in Counsellors that can effectively manage and hold the executives to account.
A 4.99% increase in Council Tax is very much higher than the rate of inflation. They also forget Council is paid after tax and national insurance. Convert the tax to gross income. It represents an ever escalating tax on normal working households. This is despite the number of new houses and increasing revenues.
Money wasted like the multi storey car park in Crewe and other projects that have wasted millions.
I hope the residents of Cheshire East register their objections.
Bad things happen when good people stand back and do nothing.
Ask yourselves where council tax rates will be in 10 years just working out a 5% increase every year. It is like compound interest. The snowballing effect is staggering.