MAYOR of Middlesbrough Ray Mallon has said he wants to decline the Government offer of a special grant to freeze council tax.
He made his comments at a meeting on Tuesday, December 18 where he outlined how Middlesbrough Council can make savings of about £13.4m from next year’s budget.
The mayor argued that accepting the Government offer to freeze council tax and take a grant would store up trouble in the future when much larger tax hikes and even more cuts would be needed.
Mr Mallon said increasing council tax by two per cent from April, 2013, was his preference but the issue would be debated again.
If the authority froze council tax the Government would grant Middlesbrough council one per cent of its budget, thought to be about £500,000.
However, Mr Mallon said any short-term gain from the grant would be outweighed by the long-term impact on the council’s budget.
That would lead to even more cuts to services estimated at £20 million over a ten-year period.
Mr Mallon said: “If the freeze grant was accepted, another £500,000 of budget reductions would have to be found next year. I do not believe this is sustainable and would give me little or no room for manoeuvre in responding to the consultation process (with the public). I believe that the freeze grant should not be accepted and that the council tax should increase up to 2 per cent.”
However councillor Chris Hobson, leader of the Conservative group on the authority, said council tax should be frozen and the Government grant offer should be accepted.
She said: “They say there will be a knock-on effect, year-on-year to the budget, but what the knock-on effect for our residents paying more every year?
"People in the public sector have had their wages frozen for three years and others too, and yet they are expected to keep paying more money. It means they have less money to spend and that affects the retail sector in town. The council tax has gone up a massive amount over the last ten years.”
A meeting of full council will be held on Wednesday, January 9 to debate the issue.