Colchester Council tax bill to rise amid 'unprecedented' budget gap

Colchester Council's cabinet is set to examine its budget plans for the coming year at a meeting on January 25.

While the budget is balanced for the coming year, it predicts a budget gap of £801,000 for 2024/25, rising to £2,480,000 by 2027/28.

The council is set to raise its portion of the council tax bill by £6.12 for the year - the maximum increase it can implement without needing approval in a local referendum.

This means a Band D property will be paying £211.59 for the Colchester Council portion of its annual council tax bill.

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A budget report said: "With inflation rising by some 11%, we recognised resident spending power would be reduced, impacting our income.

"And with council tax capped at an increase of 3%, and limited other help from Government, we faced a large and widening budget gap.

"An acute cost-of-living crisis for local government made more difficult by short lived Government budget changes and consequential hikes in borrowing costs."

The council also hopes to save some £12,000 over the coming year through a new council tax penalty for people making fraudulent claims for discounts or exemptions.

The 2023/24 budget proposals increase income by some £1.6m, secure efficiencies of £1m through transformation, and save a further £0.9m by reducing or stopping services.

Council leader David King said: "This is the toughest budget options process that we have ever faced, and we are going to have to make some very difficult decisions to deliver a legal and balanced budget.

"Since 2015-16 alone, we have lost a fifth of our purchasing power.

"And, like everyone, we are hugely affected by the latest rise in inflation, peaking at around 11% or near four times our 3% increase in council tax - representing a rise of just 12p per week for a typical property."

Council leader David King said the authority faces its most challenging budget (Image: Newsquest)

“Three principles guide us: We’ve taken the decisions needed to ensure the long-term financial stability of the council; we have done our best to preserve the services that residents need and value most, including help to those most at risk from the cost-of-living crisis, and we recognise that the best decisions are made by working with others, with those most affected, including partners and our staff, and with all political parties.

"Together, Colchester will find a way to remain ambitious for better, to continue to offer modern services for a modern city, whilst balancing our budget.”

Pam Donnelly, chief executive of Colchester Council, said: “Residents have told us what they want through the recent 'Future of Colchester' survey, and that feedback is at the heart of the options in the budget paper.

“Continuing as we are is not an option. We need to make some big changes to ensure we can balance the budget, but ultimately it will put us on a secure financial footing for the next three years.”