The councillor in charge of finances at Oxfordshire County Council has defended raising council tax by the maximum allowed and saving more than half of the extra cash from the increase for a rainy day.
The county’s portion of council tax is proposed to go up by 4.99 per cent from April.
It means a total increase of around £82 per year for an average – band D – property, adding more than £22 million to the funds the county expects to raise through council tax in the financial year 2023/24.
Two of that 4.99 per cent – around £8.9 million in Oxfordshire’s case – must go to adult social care.
Council budgets have various moving parts, including provision for backup funds.
One of these is called a contingency fund, covering what a council report describes as “demographic pressures, any unfunded new burdens or unfunded elements of government grants, any unbudgeted pay award and other inflationary risks, and the risk that proposed savings are not achieved in full”.
The authority’s director of finance, Lorna Baxter, recommends this fund should be set at £8.3 million for the new financial year. There is £1.3 million to roll over from 2022/23 and £1 million from another savings pot, leaving £6 million to be allocated from collected council tax.
That £1 million will come from general balances, a series of pots dedicated to specific areas of the council’s work in case of shortfalls.
The risk-assessed total has increased to £30.2 million for 2023/24, and with the council already shy of the level it set for this financial year, £6.8 million is required to top it back up.
Councillor Calum Miller (Lib Dem, Otmoor), the county’s cabinet member for finance, insisted that the £12.8 million would be money well spent, stating that government funding is likely to fall in real terms from April 2025.
He highlighted that £30 million worth of savings has been achieved and that £2.3 million has been set aside to shield those on the lowest incomes from the additional council tax burden.
“One of the features of the chancellor’s autumn statement was that significant real cuts are planned to budgets for 2025-26, so we must plan for the future of the county and put our finances in good shape,” he said.
“It is by having a contingency in place and balances we can draw on that this county council has been able to weather the storm over the past year, unlike some other councils that are seeing very negative financial positions and making headlines as a result.
“I am glad we are in a position to restore those finances to a stable position.”
Councillor Miller added: “The next year is going to be a very challenging one for households across the county and for our residents.
“Through this budget, we seek to ensure that we continue to invest in the frontline services that are so important to our most vulnerable residents.
“To do so, we are proposing an increase in council tax that the government has required of us, but we are also putting measures in place to protect the lowest-income households from this change.
“We are grateful to all of the residents who have contributed to our consultations. This budget reflects their feedback.
“We are committed to the efficient use of all council resources this year and in the future, and we are putting in place measures to make sure our finances are sound so we can prepare for challenging times ahead.”
The draft budget will be set at a public meeting for all councillors at County Hall on 14 February.