Huge hike in council tax among big plans for next year's budget

RBWM is seeking to raise council tax by a whopping 25 per cent for 2025/26 in its ongoing mission to save the council from its financial crisis.

Draft budget papers have dropped for the coming financial year – detailing an injection of spending to patch up ‘shoddy’ parts of the Borough, among proposed savings.

RBWM plans to spend £127.4million to deliver essential services in the new financial year (beginning in April 2025).

Far from proposing trimming back spending, this is an increase of £36million compared to the current year.

In addition, the draft budget includes efficiency savings of £5.6million, made by ‘transforming’ services rather than making cuts, the administration says.

RBWM is also asking for a loan of £60.3million from central Government, to be paid back over 20 years.

Council tax

In any given financial year, a local authority can raise its current council tax level by a maximum of 4.99 per cent, unless it has special permission to do otherwise.

RBWM wants the Government to approve a raise of 20 per cent more than this cap – making for raise more than twice as large as Slough’s largest in recent years. Slough hiked up council tax by 10 per cent in 2023.

Leader of RBWM Simon Werner said he shared the ‘gulp’ reaction of residents upon seeing that figure.

However, borough bills would still be ‘the lowest of all other Berkshire authorities’ – about £450 lower than Reading, and still one of the lowest in the country.

In real terms, the hike in council tax could mean an annual increase of up to £320 for an average band D property in RBWM – the equivalent of £6.15 a week.

Cllr Lynne Jones, cabinet member for finance, acknowledged that it is a lot in one go for people who are struggling and explained that ideally, council tax would have been raised by smaller amounts year-on-year.

However, historically low council tax has led the borough to where it is now, the administration firmly believes.

Up to £2million is already built into the budget to provide support for the most vulnerable residents, protecting them from the additional council tax increase.

Those receiving council tax relief will not find their council tax raised by more than the 4.99 per cent cap.

The Government may not necessarily approve the eye-watering council tax rise. They may also suggest splitting it over a few years, such as 10 per cent in one year and 10 per cent the next.

Spending

The draft budget includes proposed increased spending on:  

• Adult social care: Additional funding of £6.6million to meet the needs of the services and retain permanent staff now the service is back in-house
• Children’s services: to meet rising demand and costs of care placements – an additional amount of £6.8million will be invested
• Housing and temporary accommodation: an additional £1.7million funding to meet rising demand and costs
• Neighbourhood services: reinstating £3.4million of maintenance budgets for trees, street lighting, lampposts, play areas and road signs.

Increased spending on services is part of the council’s scheme to ‘fix the mess’ which Cllr Werner blames squarely on the former Tory administration.

He and Cllr Jones reiterated their dismay over past decisions to cut officer staff in RBWM, causing problems in the finance team and similarly vital departments of the council.

Having a sufficient contract management team, for example, helps ensure that contracts (such as the one for grass-cutting) are good deals and include penalties for not meeting obligations, said Cllr Werner.

The two councillors said that now is the time to get the basics right; save money down the road by investing in preventative measures.

Cllr Werner noted the broken streetlights in Maidenhead, branches falling from trees due to the recent harsh weather, rusty signs and playgrounds in need of work.

The lack of historical investment has resulted in parts of RBWM becoming ‘shoddy’, he said – and this spending is therefore ‘sensible’.

Cllr Jones added: “The damage from these years of underfunding is extensive. We’re talking a decade.”

Another preventative expenditure is investing in Family Hubs, which help families learn essential skills and receive other kinds of support - in the hopes of averting the need for intervention from social services.

The idea is this reduces the strain that social worker intervention places on children’s services, in terms of cost – it is a very overstretched service area.

Savings

This budget will include efficiency savings of £5.6million, generated from transforming services, the council says.

But these savings will not appear in the council’s coffers right away. Instead, they would manifest down the line as a result of action taken now, explained Cllr Jones.

“These are long term strategies,” she said. “Most transformation will come in over a number of years.”

RBWM expects to eventually save money by making investments in IT which will help with forecasting, getting a handle on accounts and managing debt.

An absence of data over the past 10 years has greatly hindered the council, Cllr Jones said.

RBWM also plans to bring in specialists to find savings in its adults and children’s services – and predict these specialists will be able to find about £10million in savings.*

“This is a different way of doing things – not just cuts. There have been too many cuts,” said Cllr Jones. “This is proper transformation.”

One of the administration’s enduring beliefs is in the benefit of insourcing, which it has been looking to increase in adult services, children services and handling of its property portfolio.

Cllr Werner said: “There used to be this idea that councils are less agile than businesses. That’s just not true, now.”

Using the services of private companies has proved costly in particular service areas, especially adult social care.

Financial situation now

The dire financial situation is down to a number of factors, including historical accounting errors which now amount to £30million – up £5million from last month.

Cllr Werner said he is hoping such mistakes are going to cap at £30million because RBWM is ‘pretty much at the end’ of this discovery-of-mistakes phase.

Nonetheless, the council believes it will need to borrow £60.3million from the Government, which it will have to pay back over the course of 20 years.

To reduce the impact of this, RBWM will seek to pay it back sooner using money from asset sales such as the one planned for Reform Road.

There is no guarantee, however, that the Government will approve this loan.

As it is, council debt now stands at over £230million. This debt costs RBWM more than £18.6million a year, the equivalent of almost 15 per cent of council spend.

*Edit: A previous article contained the typing error '£1million in savings'. This should have read '£10million in savings.