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Mayor says ‘desperate’ council needs £90m over next three years amid government cuts
The people of Liverpool could be asked to vote on whether they should pay up to 10% more council tax to help their “desperate” local authority maintain public services in the face of government cuts.
Joe Anderson, Liverpool’s mayor, wants to hold a public referendum – the first of its kind in the UK – to ask residents whether they would support a significant rise above the 3.99% cap.
The council is warning that if it does not increase tax then it faces cuts to all its services, with adult social care and children’s services the hardest hit. Anderson said that all council-run services, including libraries, sports centres, maintenance of parks, highway repairs, street cleaning and rubbish collections, would have to be cut by 50%.
He admitted that the local authority had no funds left, even for basic services. Laying out its parlous financial situation, he said: “We are in an absolutely desperate situation and in order to protect our services for the people of Liverpool we will have to make some tough choices. We can’t manage the budget without serious cuts and serious consequences. It’s a daunting task. And that’s why I will be asking the question, whether people would support us, in a referendum.”
City council bosses say cuts in funding from the government mean they will no longer be able to fund even basic services without raising more cash. At present the council is not allowed to raise council tax by more than 3.99% – half of which is ringfenced for social services – without holding a local referendum.
Anderson plans to implement this increase in full next year but says it still falls far short of the £90m the council needs over the next three years. His solution is to ask people if they would support a referendum for an even steeper hike to pay for social services. If the 10% were agreed through the referendum the rise would come into effect in 2018.
In the meantime Anderson said he would be proposing the maximum increase of 3.99% in council tax next year. “Of that, 2% is ringfenced for adult social care, but the requirement of social services is far beyond that. The fact of the matter is that if we took a 10% cut to adult social care and a 10% cut to children’s care then we would still have cut all the other services by 50%. That shows the scale of the problem that we face.”
He added: “If we closed all of our 19 libraries, scrapped our nine sports centres, cut all spend on culture, stopped maintaining the parks, halted all the highways repairs and street cleansing, and switched off 50,000 lights that would only save us £68m – and we need to find £90m.”
Now the council is preparing to put online a “budget simulator”, on 17 November, so the public can see the impact of changing priorities in spending. If people overwhelmingly agree with the principle of a referendum, while using the simulator, the council will propose a real referendum at a cost of £350,000 to the public purse.
Anderson said: “This is basically taking a straw poll in the simulator and I will make a decision based on that as to whether we go for a referendum, which would take place next year. That would mean we only get the money in 2018, but knowing it was coming would allow us to change the way we approach the three-year budget.”
The local authority spends £152m on adult social care and £95m on children’s social services. Anderson denied that the referendum was a gimmick to attract publicity.
He said: “I will be pointing out the severity of the challenges that we face. This is not a gimmick, the council budget simulator, but a serious attempt to engage council taxpayers in not only understanding the financial state we’re in, but have a say in what we can do, or should do.
“I accept people may say we elected you as mayor to find a solution, but it shouldn’t be just left to me and my group alone, given the serious choices. A lot of the decisions we have made in the past, and many we will have to make in the future, have been heartbreaking.
“In the past we have relied on 80% government grants. That has been reduced by 58% – £340m – and over the next three years we have to find another £90m.”
At present, residents with properties in band A – the band accounting for the majority of homes in Liverpool – pay the lowest rate of council tax, with bills of £1,116.97. So a 3.99% rise next year would raise bills by £44.57 to £1,161.54.
If people back a 10% rise the following year council taxes will increase by £116.15, or more than £2 a week extra in 2018-19. For a band D property, which pays £1,675.46 this year, a 3.99% rise next year will take bills up £66.85 a year to £1,742.31. A 10% rise the following year will mean an increase of £174.23 to a total bill of £1,916.54.
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