Babergh District Council warns Suffolk authority rejig should not ‘distract’ from funding crisis as costs spiral

A Suffolk authority has warned that the devolution debate should not distract from the need to plug a ‘severe’ funding crisis as it faces spiralling costs.

Yesterday, Babergh District Council agreed to a 2.99 per cent council tax increase, equivalent to 11p more for a home in Band D.

This rise, councillors said, would help protect vital services in the district but said many authorities face financial struggles.

Cllr Deborah Shaw, the council’s leader, said successive Governments underfunded rural councils and left them at a disadvantage.

She felt there was no evidence to suggest that larger councils would deliver these services more cheaply, with them being more remote for many residents.

She added: “If the Government thinks local government reform alone will solve the council funding crisis, then I think they are wrong.

“Rural residents also pay, on average, 20 per cent more per head in council tax because their local council gets less government grant.

“To make matters worse, council services cost more to deliver in rural areas. Residents are spread across large areas yet are still in need of vital services.

“Rural residents deserve their fair share of the funding pot to ensure functioning and sustainable communities, especially given the cost-of-living crisis.”

As it stands, Babergh keeps 10 per cent of the income from council tax. The rest goes to Suffolk County Council, the Police and Crime Commissioner and to town and parish councils.

Under the new budget, its portion of council tax would rise to £193.73 per year, up from £188.10 for a home in band D.

A spokesperson for the council warned that this cost – equivalent to £3.72 per week – goes towards a variety of council services, including waste collection, planning, maintaining green spaces and supporting the homeless.

Despite £2.6 million in savings, the authority had to dip into its reserves, using about £633,000 to plug a funding gap.

The net cost of services is set to increase, after income and use of reserves are taken into account, by 8 per cent to £15 million in the next year.

Babergh estimates that it will fall short of £14.6 million for services by the end of the 2030 financial year – but warned its reserves are likely to run dry by 2029.

Cllr John Ward, cabinet member for finance, assets and investment, said Babergh would continue to take a planned, prudent approach to protect its vital services.

“However, we and many other councils continue to face serious financial challenges and are having to make increasingly difficult decisions,” he added.

“Government funding has not kept up with the costs we face and the demand for services that our communities rely on.

“The proposed reorganisation of local government, which will see the creation of unitary councils, responsible for all council services, must not distract from the financial pressures which are pushing councils to the edge.”