Cherwell District Council is putting up housing rents and its share of council tax by the maximum permitted amid plans to handle future financial pressures.
Housing tenants will see rent go up by seven per cent – for example, a £35 increase on a bill of £500 – while Cherwell’s portion of the council tax bill for a band D property, considered to be the average, will go up by £5 to £148.50.
The council tax rise is expected to bring in £650,000 more than budgeted for 12 months ago during the financial year that begins in April 2023, while the rent increase, which will apply to council homes and shared ownership tenants, is set to bring in more than £100,000 extra.
The government set the seven per cent cap for renters, and while the council could have put up the shared ownership bills by a little more than the rate of inflation – up to 13 per cent – it chose to align that with those paying rent only, following a public consultation.
The measures form part of £1 million worth of savings to try to cover £2 million worth of financial pressures in 2023/24.
The council’s net revenue budget, the cost of providing its services, for the year is £28.2 million, almost £5 million more than the one set for 2022/23, but a lot of the extra money is set to be put aside for a rainy day.
Just over £5 million will go to contingency funds, more than half of which is assigned to deal with pressures arising from inflation.
Councillor Adam Nell (Con, Adderbury, Bloxham & Bodicote), Cherwell’s portfolio holder for finance, said “work needs to begin now and no later” on mitigating pressures expected to emerge over the next few years and strengthening backup funds in case of further shocks in 2023/24.
“The executive acknowledges it is facing considerable uncertainty in setting the budget for the next financial year and has ensured it proposes to set a contingency budget in case of further costs linked to inflation and rental income pressures,” he said.
“One particular item to note here is the cost of fuel. There has been a review of the reserves held by the council to ensure that the resources can be used strategically and are sufficient to address the financial risks the council faces.”
He also said that the rent rises represented a cut in real terms “given the level of the inflation we have experienced in the past year”.
Leader Councillor Barry Wood (Con, Fringford and Heyfords) said that the council tax rise represented “a very small amount in the scheme of things”, highlighting the variety of services that residents get for their contributions.
“I think that represents extremely good value for money for the people of this district, and they need to reflect on the relatively small amount that Cherwell District Council costs them and the relatively large amount of service they get for their money,” he added.