Councils feel the pinch in credit crunch

PUBLISHED: 09:32 08 January 2009 | UPDATED: 15:57 11 May 2010

COUNCILS in the Royston area are to tighten their financial belts as they prepare to calculate their budgets for the coming year. Important decisions will be made on how to keep front line services going without the current credit crisis biting too deep i

COUNCILS in the Royston area are to tighten their financial belts as they prepare to calculate their budgets for the coming year.

Important decisions will be made on how to keep front line services going without the current credit crisis biting too deep into council business.

Councillors at North Herts District Council already admit they will face some tough decisions.

Cabinet members received a report on December 16 highlighting the impact the credit crunch is having on council finances.

Interest receipts, which normally bring in about £3.5m to help offset the council tax, have been seriously affected by the fall in interest rates, and are expected to be in the region of £2.6m for 2009/10.

Like all councils, the income from fees for planning applications, building control inspections, and land searches have all been hit by the slowdown in property markets, and income from parking is down as fewer people use their cars.

Cllr Terry Hone, deputy leader of the district council and portfolio holder for finance, said: "We will do our best to ensure front line services are protected.

"But councillors will have to take some tough decisions on how we are going to close a gap in our budget of about £250,000 even after achieving more than £1m in efficiencies.

"Times are very tough, so the decision will also be tough."

Cllr Hone said the council was also thinking about the public and would try to help them save money.

One area being considered is to drop the planned increase in parking charges due on April 1.

"We want to help the public, but putting off this increase will mean a loss of revenue of £150,000, so we will have to find savings elsewhere," said Cllr Hone.

Members of the South Cambridgeshire District Council cabinet will be considering the impact of the credit crunch at their meeting on January 15.

A spokesman for the council said: "In common with the majority of councils, South Cambridgeshire District Council is currently experiencing a reduction in receipts from development control income, planning income and land charges income as a result of the economic slowdown.

"These pressures are currently being offset by prudent financial management by the council, including efficiency savings and under spends in other budgets areas."

Currently the council is preparing its budget proposals ahead of the meeting of full council on February 26, when the budget for 2009/2010 will be set.

The spokesman added: "In addition, the council's collection rates for council tax are continuing at the same high level as last year, and at the moment do not seem to be affected by the economic slowdown. However, the council has seen a substantial increase in housing and council tax benefit claims in this financial year.

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