Debt levels double as South Gloucestershire freezes Council Tax (From Gazette Series)

Debt levels double as South Gloucestershire freezes Council Tax

12:01pm Tuesday 7th February 2012 in News By Alexandra Womack

SOUTH Gloucestershire Council’s cabinet has agreed to freeze Council Tax again this year but the saving for residents will come at a cost.

The authority will borrow £10million this financial year to cope with the reduced revenue and is planning to borrow £20million in 2012/13, sparking concern over local levels of debt.

At a meeting of the council’s Conservative-run cabinet on Monday, deputy chief executive Dave Perry admitted the borrowing figures following three hours of intense questioning from Labour councillors.

Mr Perry, who is also director of corporate resources, was unable to provide exact figures on the authority’s level of debt but said: "I think the levels of debt are sustainable.

"I deem the budget to be robust for next year and the proposals to be sustainable."

The Council Tax freeze will save households on average £50 over the next two years.

Mr Perry said an extensive public consultation had found 51 per cent of people supported a freeze, with 29 per cent in favour of a two per cent rise and 20 per cent undecided.

When asked, Mr Perry admitted the public had not been asked what they thought of increased borrowing.

Cllr Andy Perkins (Lab, Woodstock) said: "I wonder what residents think of continuing to borrow lots and lots of money, because clearly David Cameron doesn’t think it is a good idea.

"We are setting a zero per cent Council Tax and just expecting to pay it back in the future. We are stacking up debt and it seems to me there will be a lot of nasty stuff to come in the future."

Added Cllr Perkins: "We are just transferring central government debt to local government."

The council will quality for a £2.8million government grant for freezing Council Tax and the authority’s £5million credit crunch reserve set up in 2008 now has a balance of £1.1million.

The budget, which stills needs approval from a meeting of the full council on February 22, will see investment of £5.6million in community care services, nearly £30million on school buildings and £47.2million on transport and highways. Leader of the council, Cllr John Calway (Con, Longwell Green), said: "We are certainly in a better place to deal with debt problems than many other councils because we started up drawing up plans in 2008.

"The consultation showed people want us to protect frontline services as much as possible and it is clear that services for the elderly and schools are the highest priority."

He said the council was still on course to deliver savings of £19million by 2015.